that they might not be appreciably less expensive. 

 However, there are already about 50 such under- 

 water completions in water up to 250 feet deep 

 througliout the world. Various techniques are 

 being developed by many companies to extend 

 these capabihties to much deeper waters. 



Generally, the capabiUty now exists to com- 

 plete wells in about 350 feet of water and it is 

 likely that in the near future production may be 

 flowing from depths exceeding 600 feet in certain 

 specialized locations nearshore or near fixed plat- 

 forms. Extension of producing capabilities to even 

 deeper waters may be more a problem in eco- 

 nomics than one of technologic capability, al- 

 though there are still some difficult technologic 

 problems to solve. 



D. Transportation Capabilities 



PipeUnes must be laid in any offshore field to 

 gather the production from individual wells into a 

 central collecting point where it is separated, 

 measured and put into a larger pipeline to shore or 

 where it is stored prior to being loaded onto a 

 barge or tanker for transportation to a refinery. 

 Such major pipelines have been laid in the Gulf of 

 Mexico in lengths exceeding 100 miles in shallow 

 water. An 88-mile, 22-inch line has been laid in 

 more than 300 feet of water in the Persian Gulf. 

 Gathering Unes within a field have been laid in 340 

 feet of water in the Gulf of Mexico. These may be 

 buried or laid directly on the sea floor. 



A French firm demonstrated in 1966 that 

 underwater pipelines can be laid at considerable 

 water depths. This experimental, small-gauge, 

 special-purpose line was laid in the Cassidaigne 

 Deep, near Marseille, in water as deep as 1,080 

 feet.' ' As with deep-water completions, the major 

 limitation in marine pipelines is certainly one of 

 economics and also of improved technological 

 capability. Pipelines for natural gas must be of 

 much larger diameter than those necessary for 

 petroleum, and the cost may locally be from five 

 to ten times the cost of the same Une on shore. Oil 

 pipelines commonly cost five times as much as 

 their equivalents on land. Long-distance pipelines 

 require the same facilities as onshore Unes, includ- 



Les Conduites Immergees, The Las Cassidaigne Sea 

 Line, Special Report (1967); cf. Oil and Gas Journal, July 

 10, 1968, pp. 125-126. 



ing pump stations, valves, and manifolds. These 

 add further to the cost of long-distance or deep- 

 water marine pipelines. 



Another factor which will limit the laying of 

 marine pipelines is the successful development of 

 offshore storage as well as efficient and low-cost 

 tankers and barges. Oil can be shipped completely 

 around the Arabian Peninsula from the Persian 

 Gulf to the Mediterranean for approximately the 

 same cost as it is moved less than a third that 

 distance by pipeline (even on land) across the head 

 of the Arabian Peninsula. 



Production pipelines have been laid in waters 

 greater than 300 feet deep and in lengths exceed- 

 ing 100 miles. Smaller diameter gathering lines 

 have been laid experimentally in far greater water 

 depths. As difficult as it is, technology is probably 

 less of a limiting factor with marine pipelines than 

 are the economics of such lines. However, where 

 pipelines become impractical, new methods of 

 offshore storage and transportation may solve the 

 problem. Several methods for loading tankers at 

 sea have been developed and others are being 

 designed. 



Natural gas presents more of a problem since 

 the larger-diameter pipelines required are even 

 more expensive and present more difficult techno- 

 logical problems. Cryogenic liquefaction of natural 

 gas is only practical for transportation great 

 distances or perhaps where pipeline technology is 

 very difficult. Liquefaction requires major shore- 

 based installations, but such programs are already 

 plaimed or underway between Algeria and France 

 and England, and between Alaska and Borneo and 

 Japan. 



IV. ECONOMICS OF MARINE OIL AND GAS 

 DEVELOPMENT 



Petroleum exploration and production is at best 

 a risky and expensive enterprise. It requires vast 

 amounts of money, technical know-how and 

 experience; nowhere is this more true than in the 

 inhospitable and largely unknown environment of 

 the oceans. Except for geophysical surveys, there 

 is no aspect of marine petroleum development that 

 is not at least several times as expensive as on land. 

 Vast amounts of risk and investment capital will 

 continue to be required as marine petroleum 

 development continues to expand into deeper and 



VII-207 



