9/22/2015

Interview:WellinterventionmarketdynamicsinAsiaPacific|OffshoreEnergyToday

Interview: Well intervention market dynamics in Asia Pacific

Many operators in the Asia Pacific have specialist intervention and workover teams in place that
are dedicated to improving well work and ensuring enhanced production from their current
portfolio or planning for a safe and effective plugging and abandonment program.
Due to the challenges with ageing infrastructure and facilities in the region, accessing wells and undertaking
intervention work often requires a large budget to guarantee successful operations as well as a safe working
environment.The need for offshore well intervention work on both platform and subsea wells in the Asia Pacific is
rising due to redevelopment work at brownfield sites, the increasing need for enhanced production and the need to
extract the maximum amount of hydrocarbons from current fields.
Well access is becoming more challenging and ultimately resulting in higher costs for industry. In an ever-maturing
Asia Pacific market, industry have to look to newer intervention techniques to extend production life and enhance
production volumes and recovery as well as executing safe and effective abandonment campaigns.The well
intervention market in the Asia Pacifc was estimated to be$1,240 millionin2013 and is forecast to reach$2,338
millionby 2018. China leads the intervention market in the region where an estimated 600 wells in the South China Sea
are in need of some kind of intervention. The main drivers for this sector include technical challenges such as weight
restrictions, limited spaceon the platform and issues with accessing the well but also include safety challenges,
environmental considerations, competence of staff and the reliability of equipment all to be overcome whilst keeping
costs to a minimum.

Douglas Westwood will be presenting at the Offshore Well Intervention Workshop on June 10-11 in Kuala Lumpur. For
more information on speaking, sponsoring, exhibiting or attending this meeting, download the workshop brochure at
http://bit.ly/17X8NKF

http://www.offshoreenergytoday.com/interviewwellinterventionmarketdynamicsinasiapacific/

1/4

9/22/2015

Interview:WellinterventionmarketdynamicsinAsiaPacific|OffshoreEnergyToday

Intervention methods in the Asia Pacific are focussed heavily on extending hydrocarbon recovery, improving well
integrity and undertaking plugging and abandonment operations. The industry is faced with numerous issues due to
the ageing of infrastructure and facilities, which causes additional challenges in safely accessing the wells for
intervention work.The benefits of well intervention work are well known globally but the traditional intervention
method of using a drilling rig with riser can be expensive and delays valuable well construction programmes
(particularly in the Asia Pacific where drilling programs are still very frequent). Rigless and riserless intervention, with
the use of subsea wireline lubricators and specialist vessels have proven to be a much more cost-effective and efficient
alternative to traditional rig-based methods.
Offshore Network spoke with Jason Waldie (Associate Director at Douglas Westwood) to discuss current market
dynamics in the Asia Pacific and how they will affect future offshore well intervention projects.
Offshore Network: What are the main drivers for operators in the Asia Pacific to carry out well intervention work
on their offshore well stock?
Jason Waldie: 90% of projects in the Asia Pacific are going to be in shallow water and much of this is already in place
what will be needed is a lot of drilling in order to continue the brownfield work for enhanced oil recovery.
Firstly, in terms of geographical regions the main areas that will be focussing on work associated with maturing oil
fields in shallow water are Malaysia, Indonesia and Thailand. So as long as the existing field work continues in these
regions, there will be a need for well intervention work.
As mentioned previously, oil prices are obviously a driver for well intervention work but the Asia Pacific can still
continue to make projects viable even with a slightly lower oil price.
Another positive for future well intervention work is that PETRONAS has been promoting its brownfield work to boost
production. Their drive to enhance brownfield work to enhance production is also very positive for intervention work
in this region.
From a more technical standpoint, well integrity issues also need to be taken into account. Integrity of wells is not in
the same shape as it is in some other regions such as the North Sea or Gulf of
Mexico but this is improving and is better than some other regions. Well integrity work will improve as the brownfield
industry continues to develop in the region and people become more familiar with thiswork.
Well integrity challenges are certainly a driver for intervention work in the region but will also have been challenges in
other regions when they started to take more of a focus on brownfield
developments.
Offshore Network: Over the next 3-5 years, how do you see the offshore well intervention market changing in the
Asia Pacific region?
Jason Waldie: With the current state of oil prices, this is at the top of everyones agenda currently. We probably wont
see change to the declining oil price for 6-9 months and will need to see a drop in drilling and production activity to
rebalance the supply and demand of oil only then will we see a return to normal.
This normal however may be a new normal and may not get up as high as $100 per barrel but this really shouldnt
matter too much in the Asia Pacific as the hurdle rate for the barrel in this region is generally much lower than other
areas of the world. As such, Asia Pacific projects may continue and even increase over time with more Brownfield
activity.
http://www.offshoreenergytoday.com/interviewwellinterventionmarketdynamicsinasiapacific/

2/4

9/22/2015

Interview:WellinterventionmarketdynamicsinAsiaPacific|OffshoreEnergyToday

Despite the low oil price, there will definitely be continued drilling and production projects in the Asia Pacific
particularly in shallow water areas and brownfield areas there will continue
to be a growing need in these markets as existing offshore fields are beginning to develop and there will be a need to
carry out intervention projects.
A lot of operators were banking on bigger oil prices so there may be some work that is delayed in the short term but
there will be a return to pretty much normal by the start of 2016. Albeit if oil prices settle at $75 (rather than $85-$95)
there may be a small incremental downshift in projects but this should be offset by an increasing need for brownfield
work particularly in the Asia Pacific.
So the brownfield market will be larger but people may scrutinise a little more if the oil price settles at less than $80
but westill see it as being a positive market in the Asia Pacific for the medium to long term.
Offshore Network: You mentioned Malaysia, Indonesia and Thailand earlier as being hugely important for future
well intervention work are these the main growth areas for offshorewell intervention work in the Asia Pacific?
Jason Waldie: Malaysia, Indonesia and Thailand are certainly the main countries for future well intervention projects
and to a slightly lesser extent Vietnam these are certainly the areas of focus for contractors looking to win work
regarding well intervention projects.These countries are all serviced by National Oil Companies (NOCs) and
organisations that have come in from overseas to help on upcoming projects. The other markets are probably not as
key at this moment in time:
China is a very different market to get into as the majority of work is contracted internally. In China, there is a certain
amount of well intervention work that is required to be undertaken but for
international companies it is very difficult to gain a foothold in this market. As soon as they develop their industry
domestically, they tend to ensure work goes to Chinese companies. I just dont see this as a big market for
international companies.
Papua New Guineais very new so brownfield work is not really happening there.
The Philippines is a very small market regarding well intervention work.
Burma is a very new industry where new blocks are being opened up regularly. They do have some large gas fields
but again well intervention work is not that frequent.
Australia is also worth a mention. This area is very similar to the North Sea and Gulf of Mexico as it is comparatively
high cost. We will see a number of delays in projects here until they can figure out their project economics but this
could then be a key area for well intervention work.So the four key countries that the intervention market need to be
concerned with for the time being are Malaysia, Indonesia, Thailand and Vietnam.
Offshore Network: As the number of subsea wells increases in the Asia Pacific, so will the need to intervene on
these wells. How will the increased challenges associated with subsea well interventions affect industry?
Jason Waldie: We havent seen as many subsea well completions in the Asia Pacific as we first thought there would be
this is because its much cheaper and simpler to continue with platform wells as industry already have the
technology and service providers to work on subsea wells. As developments continue into deeper water, this may
change.
Going forward, there is a small percentage of subsea wells that are in deepwater environments in the Asia Pacific
which will need intervention work going forwards but the majority of intervention
jobs will be with the shallow water platform wells.
Offshore Network: Any final thoughts on how the Asia Pacific market will continue to develop in the short to
medium term?
Jason Waldie: Industry can go one of two ways. The problem can be somewhat fixed in the short term if production is
halted or cancelled in some parts of the world or it could drag on for a while.
We need to note that a lot of companies plans have been made with estimations of $75-$80 oil which is going to cause
some delays. They will still continue to do work because the economics are there but they were making plans to get oil
coming through which would produce revenues at a higher figure than it is currently at.I know that share prices within
some of these companies have been affected due to this uncertainty in the market in the Asia Pacific as well as the rest
of the world so theres definitely some effect on industry.
But it is important to note that South East Asia particularly is less heavily affected as many other regions around the
world due to overall costs for projects being lower.

Offshore Energy Today is sharing this interview with permission from Offshore Network Ltd.,an independent business
intelligence & conference provider catering speciffcally to the offshore oil & gas industry.

http://www.offshoreenergytoday.com/interviewwellinterventionmarketdynamicsinasiapacific/

3/4

9/22/2015

Interview:WellinterventionmarketdynamicsinAsiaPacific|OffshoreEnergyToday

Share this article

Follow Offshore Energy Today

Posted on February 25, 2015 with tags Asia pacific, Interview, News, Well Intervention.

One thought on Interview: Well intervention market dynamics in Asia Pacific

1.

Sandeep Shelar says:

February 26, 2015 at 06:16

Please show correct map of Bharat(India) including Jammu and Kashmir as it is part of Bharat. Do not show
incorrect map.
Comments are closed.

Popular Articles

Not all is doom and gloom

for North Sea
September 21, 2015

read more

Petrobras ends contracts for

two PSVs
September 21, 2015

Wood Group wins Peregrino award

September 21, 2015

read more

read more

Antrim abandons four wells

September 21, 2015

read more

Events

Jobs

http://www.offshoreenergytoday.com/interviewwellinterventionmarketdynamicsinasiapacific/

4/4