62- www. world- petroleum. org Industry facts The price of North Sea Brent crude oil, current affairs and the Dalia development $ a barrel Source - US Energy Information Adminisitration ( oil price) Photo © Marco Dufour 0 30 15 60 45 90 75 120 105 150 135 1997199819992000200120022003200420052006200720082009 Discovery of the Dalia field Start of FPSO topsides fabrication Launch of FPSO hull in South Korea Drilling starts Asian financial crisis George Bush elected US president Invasion of Iraq George Bush re- elected US president Barack Obama elected US president Start of topsides installation on FPSO hull Start of offshore installation work Arrival of FPSO in Angola First oil from Dalia Banking crisis triggers recession
63- www. energy- future. com Industry facts Dalia: taking the long- term view Oil companies think for the long term. They tend not to get too excited about very high oil prices or too alarmed by very low oil prices, because a certain amount of price cyclicality is a fact of life. Things tend to even out in the end and they base their plans on assumptions about the average long- term price. France's Total discovered the Dalia field in 1997. It took over nine years to produce first oil. In 1997, oil prices were around $ 20 a barrel. But, within a year, they'd halved. Four years later, they started to rise and by mid- 2008, just 18 months after project start- up, they reached nearly $ 150 a barrel. By mid- 2009, they'd roughly halved from that level, having nearly fallen as far as $ 30 in between. Political cycles are shorter than the oil industry's planning cycle too, which can be frustrating for oil companies, because politicians sometimes take decisions that might be expedient in the short term, but aren't necessarily conducive to investment over the kind of horizons the oil industry contemplates. The time between the discovery of Dalia and first oil is about twice the length of a typical government term. Why did it take so long to get the oil flowing at Dalia? In all projects, but especially those offshore, or in inhospitable, remote and infrastructure-deficient locations, oil developers face considerable physical and organisational challenges. Dalia's not easy to get to for a start: the field's 135 kilometres off the Angolan coast. The water's deep too - ranging from 1,200 to 1,500 metres, over an area of about 230 square kilometres. Extensive kit is needed to produce the oil and gas: the floating production, storage and offloading ( FPSO) vessel being used to produce the oil is one of the largest ever built. The hull is 300 metres in length, 60 metres wide by 32 metres high. On top of it are 29,400 tonnes of deck and facilities ( topsides). The vessel can store up to 2 million barrels of oil. Beneath the water, the project involved the drilling of 71 wells, including 37 producing wells. The network of tubes that transports fluids from the seafloor to the surface is more than 53 kilometres in length. Reservoir conditions are unhelpful: the oil is highly viscous and acidic. After it's been cleaned up, water that was produced with the oil is pumped back into the reservoir through 35 kilometres of injection lines and down 31 water- injection wells. Another 13 kilometres of tubes carry natural gas that was produced with the oil back to the reservoir for reinjection. Co- ordinating this activity takes years, requires the input of numerous equipment and technology suppliers, and thousands of workers. It's also not cheap: the investors in Dalia spent $ 4 billion - not the kind of sum on which you make snap decisions. But, with reserves estimated at close to 1 billion barrels and production capacity of around 240,000 barrels a day, the field is worth the investment.