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SWOT Analysis Paper: Exxon Oil

Oil and gas production goes through four distinct phases that may take several decades to complete.

The exploration phase entails the search for a commercially exploitable hydrocarbon reservoir. This phase demands thorough research into the geology of the region, usually through the use of seismic surveys that give geologists a “picture” of the rock formations below the seabed.

Second, this phase requires exploration drilling from special vessels designed to remain stationary in virtually all kinds of weather. Most of the exploration drilling done in the North Sea, particularly in the 1970s and 1980s, has been done by semisubmersible vessels. To simplify a bit, these ships consist of a drilling rig mounted on two submarines that can be lowered far enough below the surface to escape the wave action of the sea. Some semisubmersibles have now been thoroughly winterized to allow for year-round drilling above the Arctic Circle on the Norwegian shelf.

The second phase of offshore operations is the development phase. Once a field has been discovered and declared commercial by the licensees, a plan is drawn up to produce the oil or gas (or both), and the equipment needed is designed, ordered, manufactured, and set in place. Water depth, storms, great waves, strong currents, wind, cold, distance from shore–these are just a few of the extremes with which engineers have had to contend.

The technical solution has most often been to set one or more steel or concrete “jackets” on the seabed with a deck covered with production and accommodation modules attached to its protruding legs. These giant platforms, some taller than the Empire State Building, must be equipped to drill and produce from as many as forty or more wells, contain the equipment to ready the hydrocarbons for transportation, and house, feed, and entertain the 300 or more people needed to operate the biggest platforms.

Several of these structures, some of which may be connected to other pieces of equipment like loading buoys, unmanned subsea production wells, and floating accommodation platforms, may be placed on one field or a set of smaller reservoirs. For example, the Ekofisk complex on the Norwegian shelf, which produces from seven individual fields, is comprised of thirty-eight structures, including drilling, production, pumping, storage, and quarters platforms, plus flares and bridges. This and other North Sea production sites are indeed cities on the sea.

The development phase usually takes one or two years but may last up to a decade or more if technical or economic barriers are encountered. Often the development of a project continues after the first petroleum is produced as additional phases of the plan are implemented. Norway’s Troll gas field, for instance, was declared commercial in 1983 but had to await the signing of a gas contract in 1986 before the development phase could really get underway.