With all of the attention devoted to the US shale boom and hydraulic fracturing in recent years, it is somewhat somewhat surprising to see how relatively under the radar offshore projects have become.
Surprising for a number of reasons: the 2010 mega-disaster in the Gulf of Mexico involving Halliburton (HAL) , Transocean (RIG) , and, of course, the company formerly known as British Petroleum (BP) . Furthermore, US oil and gas giant ExxonMobil (XOM) and Russia’s state-controlled Rosneft are currently defying an outbreak of cold war-era geopolitics to do some fishing around in the waters of the arctic circle for what are thought to be the largest and most virginal of oil and gas reserves on the planet.
Indeed, while so much time is spent talking about onshore unconventional plays, it is by now more or less common knowledge that these aren’t exactly the panacea of American energy independence that they are regularly touted as, at least not when compared to the promise of deepwater finds off the coast of Brazil, or the aforementioned Arctic Circle, or even the calamity that has become Kazakhstan's Kashagan field.
It is safe to say that the future of oil and gas, in the long-term at least, hinges on deep sea projects, and that means that in the coming years ever-greater emphasis will be placed on refining and making more cost-efficient the technology needed to access reservoirs that lie as much as a mile beneath the seabed in some of the deepest waters there are.
With this in mind, investors looking to position themselves ahead of a potential offshore “supercycle” would do well to familiarize themselves with the nuts and bolts of deep sea oil and gas exploration and production. The following video offers a very concise and helpful summary of what goes into drilling a deep sea well.
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