Gurdip Singh - Contributing Editor
DONG Exploration & Production is in the development phase with the Nini East project in Denmark and is working on the financial investment decision (FID) for yet another Danish field called Hejre, its president, Søren Gath Hansen, said in an interview withOffshore in Singapore recently.
In Norway, the company participates in development of Alve field, which is expected to come onstream in early 2009. DONG E&P also is working on FID for two other fields, Trym and Oselvar, off Norway, Gath Hansen said during the christening of a jackup rig in Singapore’s Keppel FELS shipyard.
The Nini East field in the North Sea is estimated to cost about $400 million for an unmanned platform. “Our target is first oil from 2009 with total recoverable reserves of approximately 17 MMbbl of oil,” Gath Hansen said. The field development includes two production wells and one water injection well.
A stand-alone platform also is being considered for the Hejre field off Denmark. The project still is in the conceptual phase but with current plans for six to eight production wells. “We are expecting first oil in four to five years after FID is decided and field production of approximately 130 MMboe,” he said.
DONG E&P is operator of Hejre with 60% stake. It acquired 30% interest from ConocoPhillips in March 2007 and another 10% from Bayerngas Norge AS in 2008. Bayerngas holds 15% and StatoilHydro 25% of the remaining interest in the Hejre field, which was discovered in 2001.
The plan is to use existing Danish infrastructure to export the natural gas. These two fields will add new production to Denmark’s more than 300,000 b/d of oil and 10 bcm (353 bcf) of gas annual production in 2007.
Comparatively, the Norwegian Oselvar field is expected to supplement DONG E&P’s gas production in Norway where the company is already a significant natural gas player, producing from the Ormen Lange field since last year.
A number of options were being evaluated to developing Oselvar, Gath Hansen said, adding that Oselvar most probably will produce via an existing hub in the area with the FID based on a platform or subsea system. These five fields will boost DONG E&P’s production.
He cited the success of Ormen Lange, which is expected to peak production at 20 bcm (706 bcf) of gas in 2010.
“Our current oil and gas production comes from licenses on the Danish and Norwegian continental shelves. Total production volumes decreased in 2006 and 2007 due to our revised strategic focus on procuring gas rather than oil. But Ormen Lange would help recover production,” he said.
Ormen Lange has been producing since October 2007 while its development continues through to 2015 including a subsea compression pilot program and a third subsea installation. DONG E&P expects in total 24 wells to be drilled including the second phase of the development. A fourth subsea installation for the northern part of the field with capacity of an additional eight wells also is being considered while undertaking the second phase of the development. Offshore gas compression facilities are planned to be installed between 2013 and 2016 to maintain reservoir pressure.
DONG E&P’s current estimated proven and probable (2P) reserves exceeds 350 MMboe distributed on approximately 75% natural gas and 23% oil.
Gath Hansen said the company also is preparing to drill in concessions West of Shetlands, a follow on to three of the largest discoveries made in the area in recent years. DONG E&P’s UK branch is coordinating the joint industry and UK government West of Shetland Task Force to identify a regional, collective solution to bring gas from the region to market.
“Currently our portfolio includes 19 UK licenses with a direct interest in many of the discoveries yet to be developed, including Cambo, Laggan, Rosebank/Lochnagar, Tobermory, Tormore, and Torridon. At the asset level, our current focus is on bringing the Laggan/Tormore, Rosebank/Lochnagar fields through concept selection to project sanction,” Gath Hansen said.
DONG Energy is committed to drill exploration and appraisal wells in the region to bring discoveries onstream as quickly as possible.
Elsewhere, since September 2007, DONG E&P is operator in a license to explore an area west of the Disko Island in Greenland, partners being ExxonMobil and Chevron. This unexplored area is a challenging exploration environment for DONG E&P. Ice, deepwater, sensitive environment, and remoteness make economic development challenging for the foreseeable future, he said.
