Dear reader,
There are 1,470 offshore rigs world wide (and 180 in the north sea) but rigs can be replaced by a production platform and estimates show there are 6,500 offshore oil and gas installations worldwide, about 4,000 of which in the U.S. Gulf of Mexico, 950 in Asia, 700 in the Middle East and 400 in Europe.
So that’s a potential market of 1,440-4,000 projects that may require POS’ new technology, Replacement Tubing Hanger Neck Seal ("HG-R") for workover applications, announced today.
1,440-4,000? Yes according to Lohoefer (Lohoefer et al., 2000) which carried out a survey of Gulf of Mexico operators indicated that about 30%–50% of the pressure seals in overlaps failed.
Meanwhile (Van Dort, 2009)’s report indicates that up to 18% of offshore wells worldwide are estimated to have some form of weakness or uncertainty in seal assemblies and the record of failures of critical liner-hanger seals in High Pressure High Temperature (HPHT) completions, for example, has become a large concern.
But it’s not just about leaks or the risk of leaks, another reason for HG-R can be production limitations due to the quality of the seal. Throttling back flow rates can sometimes be necessary to preserve the seal and it’s the lesser of two evils. But if HG-R can provide a solution then it can be fitted en situ and without any shutdown and once installed flow rates - and profits - can increase.
The factors which determine the success of a seal are pressure, temperature, chemical conditions, the Seal annular fit (i.e. radial width of seal relative to annular space), the compression ratio and contact pressure and elastic modulus. Get any of those wrong, or if one of those factors change you may have a problem.
The principle is that the HG-R will provide a compressive load essentially bolstering the existing seal but also based on Hertzian Stress Theory which lengthens the wellhead’s economic life and reduces the periodic cost of maintenance. Crucially you don’t need to shut down the well to add the HG-R.
The alternative to POS’ offering is to inject materials to try to restore or “re-energise” the seal’s integrity but these bodge jobs come with a “it’s temporary” health warning. Another alternative approach is to actually shut down the well, and remove the tubing and replace - something which carries great cost especially for a deep sea well.
Whilst today’s RNS isn’t another contract win, I don’t think people should sneer at the clever progress this nanocap is making to address “real world” challenges in a net zero world where ESG matters and leaks are serious blots on your homework.
One can imagine an RNS where this technology leads to a £10m-£20m (or more) contract to proactively add HG-Rs to the estate of an operators wells. Norway’s Energean, for example, prides itself on its low CO2 and world-leading performance. Norway also treasures its fish and fishing. Also for other well head manufacturers the possibility to licence this technology remains a possibility - including our past collaborator SLB!
Is it so hard to think POS can find customers for this technology? And if you are an offshore operator or a manufacturer facing some unhappy customers, do you really want to play Russian Roulette with the seals?
This is not advice.
Oak