World’s Deepest Offshore Oil Well To Be Drilled In Colombia’s Caribbean Waters

Colombia is set to establish the world’s deepest offshore well before the end of the year. Occidental Petroleum Corp. and Ecopetrol SA are prepared to drill the Komodo-1 well in the Caribbean Sea to a depth of around 3,900 meters (almost 13,000 feet).

The depth, almost equivalent to building ten Empire State Buildings, would break the existing record held by a well in Angola.

The move comes as oil corporations across the world seek to explore new possibilities as North American shale production growth slows.

SLB, the world’s largest offshore drilling contractor, estimates more than $100 billion in offshore project commitments for 2024-2025, signalling a major shift toward deepwater exploration.

According to James West, an analyst at Evercore ISI, the renewed focus on offshore drilling comes from the need for energy security, regionalization, and a maturing North American shale supply. West states that the deepwater and Offshore are experiencing an incredible boom.

In offshore drilling, wells are measured in two ways: water depth and true vertical depth. Water depth is the distance from the floating rig to the sea floor, whereas TVD is the distance from the rig to the bottom of a well deep within the Earth.

The Komodo-1 project explores the limits of water depth.

Advances in marine seismic technologies have made possible deeper exploration. Elsa Jaimes, Ecopetrol’s offshore chief, emphasized that improved technology and Colombia’s vast offshore potential contribute to this ambitious project.

According to industry data provider Enverus, over 40 wells are expected to be drilled globally this year in waters at least 1,500 meters deep, marking 2024 the busiest year for ultra-deepwater drilling in a decade.

Dai Jones, director of global intelligence at Enverus, stated that the desire to drill deeper is driven by increasing demand for energy and the capacity to reach these depths.

Offshore drilling has higher expenses than shale drilling, but the long-term potential and stability are fascinating.

The previous decade saw a rapid development of deep-sea rig fleets, only to be obstructed by the onshore shale boom and the oil price crises of 2014 and 2016. Some major offshore drillers had to abandon expensive floating rigs.

However, deepwater wells are expected to account for up to 25% of global oil output by the end of this decade, up from 20% currently, according to SLB.

Wallace Pescarini, president of SLB’s Offshore Atlantic division, acknowledged the increased challenges of deeper, higher-pressure situations. Pescarini stated that they have seen customers going deeper and deeper into more challenging environments.

Although offshore drilling carries higher risks and expenses than shale, the potential profits are immense.

Enverus’ Jones emphasized that, while drilling a dry hole involves a major risk, the potential benefits could make the investment worthwhile. He added you’re taking a gamble, and you can spend a lot of money taking that gamble.

Reference: Bloomberg

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