more than the salvage value of the pipe. However, the connection between 

 the line and the platform is cut at the base of the riser after which 

 the line is capped and sealed. 



Tank farms erected for receiving OCS crude oil can obviously be 

 used for storage of oil from other sources but it is more likely that 

 they will be scrapped. Natural gas processing plants would be salvaged 

 or possibly converted to another use. 



1.3.3 Time Constraints 



Like any business, the oil and gas industry operates for profit. 

 Its schedules, along with other operating strategies, are consistent 

 with optimizing that profit. OCS development activity follows a 

 sequential process in which success during one phase will determine if 

 the next phase should be either initiated, delayed or cancelled. The 

 whole process is very complex and risky. 



The time frame for bringing an offshore oil or gas field into 

 production from the time of initiation is conditioned by three principal 

 influences: 



1. Geologic factors - involving acquisition of knowledge on 



the nature of the geologic structure and lithology underlying 

 the area which in turn determines the pace of discovery and 

 the production parameters. 



2. Economic criteria - encompassing the myriad of marketing, 

 managing, organization, capital availability and other 

 problems facing an industrial firm considering offshore 

 hydrocarbon development. 



3. Regulatory processes and constraints - including all of 

 the Federal and State (and local) reports, operating 

 orders, rules, regulations, standards, and procedures 

 that need to be followed and observed in all phases of 

 offshore operations. 



It may take as much as ten years from the time an entrepreneur 

 decides to embark upon an offshore venture to the commencement of 

 production. Even after initial discovery, there will be a protracted 

 period in which appraisal wells are drilled to define the size of the 

 field, productive geologic horizons, outer geographic boundaries, and 

 recoverable reserves. The information derived from appraisal wells is 

 utilized in determining the field development requirements, such as the 

 number of production platforms, the number and location of production 

 wells to be drilled, the size and number of oil tankers or the size and 

 location of pipelines, and the capacity of onshore receiving terminals. 



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