The oil and gas industry is facing challenges and dilemmas encountered in 2009 such as contract delays, furloughs and rig closures are resurfacing. As oil and gas prices continue to decline, oil companies are starting to consider rig stacking as an alternative to reducing overhead and operating costs. This presentation explored what the future might hold for the subsea market, current infrastructures and future deepwater project development. This presentation was presented at the 2015 Deepwater Technical Symposium in New Orleans, Louisiana.

1. [10 Things That May Affect the Future of Subsea Production]
[Hubie Fix, Life Cycle Engineering]

2. 1. Subsea Hardware Spending and Production
Depth Expected to Increase
According to Douglas Westwood’s latest estimates, Subsea hardware spending in 2014-18 is forecast to nearly
double the size of installed subsea infrastructure.
• Established Deepwater regions in Brazil, West Africa and the US Gulf of Mexico
• Newly discovered offshore gas provinces in East Africa and the Eastern Mediterranean
• >1000m Water Depths
• Provide additional markets which will lead to positively impacting IRM (Inspection, Repair &
Maintenance) expenditure
• Subsea hardware capex expected to total US$117 billion between 2014 and 2018 (80% growth).

3. 1. Subsea Hardware Spending and Production
Depth Expected to Increase
ROVs (Remotely Operated Vehicles) are expected to gain market share over the coming five-year period.
• ROV Inspections
• Replacement Tasks
• Cutting Operations
• Cleaning Operations
• Hatch Operations on Subsea Structures and Valves
• Subsea Equipment Troubleshooting

4. 1. Subsea Hardware Spending and Production
Depth Expected to Increase
AUVs (Autonomous Underwater Vehicles) are also expected to gain market share over the coming five-year
period.
Life-of-Field Inspection Surveys are currently in the early stages of commercial development with an expected
increase in demand for the future.
• High-Resolution, High-Speed
Seafloor Surveys & Mapping
• Geophysical Site Inspections
• Pipeline Route Planning
• Pipeline & Subsea Structure
Inspection
• Hydrography

5. 2. Baby-Boomer Generation Retirement
Roughly 50% of the working population in the oil & gas industry will be eligible for
retirement in 2015. (Current average retirement age is 62)
• Employee Training
• Subsea Operational Standards & Knowledge Retention

6. 2. Baby-Boomer Generation Retirement
Employee succession planning to mitigate work force & knowledge loss.

7. 3. Subsea Condition-Based Maintenance & Monitoring
Rig Uptime
Performance
Safety
Environment
Regulatory
Compliance
Equipment
Life Cycle
Maximize Asset Availability & Subsea Production
• Proactive approach to Preventative Maintenance

8. 3. Subsea Condition-Based Maintenance & Monitoring
Condition Performance Monitoring
• Data Trending & Downtime Mitigation
• Rig Asset Integrity Dashboards
• Equipment Alerts & Problem Diagnosis

9. 4. IADC Well Control Training & Accrediting
Comprehensive
Well Control
Culture
Fundamental &
Supervisory
Levels
Team Problem
Solving & Decision
Making
IADC STANDARDIZED WELL CONTROL ACCREDITATION

10. 5. The Environment
The U.S. Oil and Gas sector ranked second in emissions to power plants
• Releasing 225 million metric tons of carbon dioxide equivalent in 2011.
More than a third of that came from methane, the main constituent of natural gas,
and a far more potent global warming gas than carbon dioxide.

11. 5. The Environment
The U.S. Environmental Protection Agency Clean Power Plan to issue final
Greenhouse Gas Emissions in August 2015.
GOAL
•Cut carbon emissions from the power sector by 30% from 2005
levels
METHODS
•New rules on greenhouse gas emissions
•Final regulations on the gas and oil sectors estimated to be
released in 2016
IMPACT
•Increased spending for underground pipelines for Clean CO2
Power Plants
•Possible increased demand for alternative energy and fuel
additives (ethanol)

12. 5. The Environment
Thermohaline Circulation (The Ocean Conveyor Belt)
• Has an impact the Earth’s climate
• Deepwater Temperatures, Densities and Salinity

13. 5. The Environment
Thermohaline Circulation
• 2014-2015 shows extraordinary record cold pool of water south of Greenland
• Risk for generating significant disruptions to atmospheric winds and related
weather.

14. 6. Offshore vs. Shale Production
Over the last 10 years, offshore investments have increased from ~ US$150 billion in
2005 to ~ US$360 billion in 2014.
With the help of horizontal hydraulic fracturing becoming proven and economical. Shale
investments increased from almost zero to ~ US$160 billion in 2014.

15. 6. Offshore vs. Shale Production
Offshore production remained largely unchanged at 27 million barrels of oil equivalent per day.
Shale production increased from less than 100 thousand barrels oil equivalent per day in 2006,
to an estimated 7.5 MMboe/d in 2015.
The reactiveness of the production to the investments is largely a factor of the project life cycle.

16. 6. Offshore vs. Shale Production
Over the last five years, shale has experienced extraordinary development, showing much
higher production growth than offshore.
Shale reduces activity the quickest when prices dropped but will also be the fastest to
recover once oil prices increase.
The shale industry may now be a close predictor for how offshore oil and gas companies will
react and operate to market conditions.

17. 7. Methane Hydrates
• “Fire Ice”
• Natural Gas
• Harsh Environments
• Technical Challenges
• Production Growth

18. 7. Methane Hydrates
The Fukushima Incident of March 11, 2011 led to Japan’s entire nuclear industry to be shut down,
resulting in Japan’s gradual shift back to fossil fuels for power generation.
Without nuclear energy, Japan’s domestic energy resources could only meet less than 9 percent of
the nation’s energy requirement.
On an annual basis, LNG imports cost the country nearly $700 billion.

19. 7. Methane Hydrates
In March 2013, by lowering a methane hydrate reservoir’s pressure, a Japanese drilling ship
of the Japan Oil, Gas & Metals National Corporation (JOGMEC) successfully extracted
methane hydrates from the seabed off Central Japan (Nankai Trough).
During 6 days it produced 120,000 cubic meters in total, i.e. 20,000 cubic meters a day of
natural gas.
Estimates indicate that the reserves of methane hydrate correspond to a 100-year supply of
natural gas for Japan, making it an important potential source of energy.

20. 8. Unmanned Platforms
Maersk Oil’s unmanned platform Tyra Southeast-B finished construction
mid-2014 and started production March 2015.
• Current production 2600boepd
• Planned to drill 8-12 horizontal wells
• Total delivery
– 20 million barrels of oil
– 70 billion standard cubic feet of
gas.
• Currently used in shallow waters
• Technology advances may move
further and further deep water.

21. 9. Offshore Regulations
ISO 55000: International Standard for Asset Management (January 2014)
• Overview of Asset Management
• Principles and Terminology
• Expected Benefits
Ten Things to Know about ISO 55000 – the International Standard for Asset
Management
• By Mike Poland, CMRP, Life Cycle Engineering
Extending the public comment period on the Notice of Proposed Rulemaking for “Oil
and Gas and Sulphur Operations on the Outer Continental Shelf – Blowout Preventer
Systems and Well Control,” which was published in the Federal Register on April 17,
2015 (80 FR 21504)
• Proposed rule would focus, at this time, on blowout preventer requirements,
including incorporation of industry standards and revision of existing regulations.
• Reforms in the areas of well design, well control, casing, cementing, real-time
well monitoring, and subsea containment.
• Arctic-specific standards for oil and gas drilling in the remote region.
• Draft leasing plan, pencils in one possible sale of mid- and south Atlantic acreage
but rules out auctions in the Pacific Ocean and in eastern Gulf waters.

22. 10. Iran Oil & Gas Sanctions Lifted
• Iran hasn't been able to sell oil to the United
States since 1995. Most major Western
countries imposed sanctions within the last
five years aimed at curbing Iran's nuclear
program.
• On July 14, 2015 Iran and a group of six
nations led by the United States reached an
agreement limiting Tehran’s nuclear ability for
more than a decade in return for lifting
international oil and financial sanctions.
• Iran could add as much as 500,000 barrels of
oil per day to worldwide markets by the end
of this year.
• Once we get past Labor Day, we should see
gas falling by 10 to 15 cents a month," said
Tom Kloza, chief oil analyst with the Oil Price
Information Service. "By December a lot of
places are going to see gasoline at $2 or
less."

23. References
1. Loffman, Matt. “Subsea infrastructure – growing and moving deeper” (2015, January 1). Retrieved from
http://www.oedigital.com/regions/item/7876-subsea-infrastructure-growing-and-moving-deeper
2. Riffkin, Rebecca. “Average U.S. Retirement Age Rises to 62” (2014, April 28). Retrieved from
http://www.gallup.com/poll/168707/average-retirement-age-rises.aspx
3. Cheney, Paul. “Oilpro.com: Oil & Gas Social Network Launched to Bridge Industry Generation Gap” (2013, October 7).
Retrieved from http://www.bizzuka.com/company-blog/oilprocom-oil--gas-social-network-launched-to-bridge-industry-
generation-gap
4. Anderson & Rasmussen “Condition and Performance Monitoring of Subsea Production Systems” Retrieved from
http://www.spe.org/jpt/article/5190-young-technology-showcase-14/
5. Retrieved from http://www.iadc.org/wellcap/
6. Retrieved from http://www.iadc.org/wp-content/uploads/2015/06/2014-ISP-Reporting-Guidelines.pdf
7. Walton, Robert. “EPA signals final Clean Power Plan rule due in August” (2015, May 27) Retrieved from
http://www.utilitydive.com/news/epa-signals-final-clean-power-plan-rule-due-in-august/399793/
8. Retrieved from https://robertscribbler.wordpress.com/2015/03/23/world-ocean-heartbeat-fading-nasty-signs-north-atlantic-
thermohaline-circulation-is-weakening/
9. Nysveen, Per Magnus and Wei, Leslie “Offshore vs. Shale, which will prevail long-term“ (2015, April 9) Retrieved from
http://www.ogfj.com/articles/print/volume-12/issue-4/features/offshore-vs-shale.html
10. Retrieved from http://oilprice.com/Energy/Natural-Gas/Methane-Hydrates-Larger-Energy-Opportunity-Than-Shale.html
11.Retrieved from http://www.jogmec.go.jp/english/oil/technology_015.html
12.Retrieved from
http://www.maerskoil.com/media/newsroom/pages/firstproductionfromnewplatforminthedanishnorthsea.aspx
13.Isidore, Chris. “$2 gas will be back after Iran nuclear deal” (2015, July 14). Retrieved from
http://money.cnn.com/2015/07/14/news/economy/2-gas-iran-nuclear-deal/

24. [10 Factors That May Affect the Future of Subsea Production]
[Hubie Fix, Life Cycle Engineering]