Norwegian E&P activity continuues to flourish

Major Norwegian field development projects Field/operator Location Reserves Development concept Capex Nkr Start-up *Vigdis 34/7 213 MMbbl Subsea 4.7 bn Jan-97 Saga 2.4 bcm *Balder 25/10 & 11 170 MMbbl FPSO 4.7 bn Aug-97 Esso *Njord 6407/7 & 10 220 MMbbl Semisub 5.9 bn Oct-97 Norsk Hydro 7.2 bcm *Norne 6608/10 & 11 480 MMbbl FPSO 7.0 bn Aug-97 Statoil 15.6 bcm *?sgard 6506/11 & 12, 775 MMbbl FPSO (oil) 30.0 bn Oct 1998 (oil) Statoil/Saga 6407/2 & 3, 232.0 bcm Semisub (gas)

Statoil and Saga celebrate 25-year anniversaries

Major Norwegian field development projects
Field/operatorLocationReservesDevelopment conceptCapex NkrStart-up
*Vigdis34/7213 MMbblSubsea4.7 bnJan-97
Saga2.4 bcm
*Balder25/10 & 11170 MMbblFPSO4.7 bnAug-97
Esso
*Njord6407/7 & 10220 MMbblSemisub5.9 bnOct-97
Norsk Hydro7.2 bcm
*Norne6608/10 & 11480 MMbblFPSO7.0 bnAug-97
Statoil15.6 bcm
*?sgard6506/11 & 12,775 MMbblFPSO (oil)30.0 bnOct 1998 (oil)
Statoil/Saga6407/2 & 3,232.

0 bcm

Semisub (gas)Oct 2000 (gas)
6507/11
*Gullfaks Satellites34/10260 MMbblSubsea6.4 bnOct-98
Statoil
*Oseberg East30/6148 MMbblFixed platform3.3 bnOct-98
Norsk Hydro
*Varg15/1257 MMbblFPSO + wellhead pfm3.0 bn2Q/1998
Saga2.0 bcm
*Visund34/8305 MMbblSemisub7.3 bnJun-98
Norsk Hydro56.0 bcm
Jotun25/8 & 7190 MMbblFPSO + wellhead pfm5.9 bnmid 1999
Esso5.

0 bcm

Oseberg South30/9336 MMbblFixed platform7.6 bn1999
Norsk Hydro11.0 bcm
Troll Oil II31/2, 3, 5 & 6723.4 MMbblSemisub16.5 bn3Q/1999
Norsk Hydro
Hermod25/8 & 11485 MMbblFloater--2000
Norsk Hydro
Oseberg Gas30/6 & 9115 bcmFixed platform3.6 bn2000
Norsk Hydro
Snorre North34/4 & 7250 MMbblFloater or subsea--2000
Saga
Source: Scanboss * approved project

Despite the recent loss of two oil ministers, the Norwegian sector continues to flourish, with activity remaining high on the exploration, development and production fronts. Both Statoil and Saga Petroleum celebrate their 25th anniversaries this year, having established themselves as enterprising companies with promising futures.

Norway's reputation for political stability has not suffered despite the ministerial turnover. Jens Stoltenberg left to become finance minister, while his successor Grete Faremo hardly had time to get her feet under the table before allegations of irregularities by the security forces at the justice ministry, where she had been minister, forced her resignation.

Effective policy

Her place has now been taken by Ranveig Froiland. Meanwhile current policy is seen to be bringing the desired results and remains essentially unchanged. Perhaps the most notable recent development has been the preparation by the sector of the Intsok report, which will pave the way for a concerted assault by Norway's oil industry on the world market.

The slack rig market of a couple of years ago has been transformed into an ultra-tight market in which operators are looking to long-term contracts and sharing arrangements to ensure rig availability. Demand is kept strong by high exploration and development activity, with a premium on the modern units required by frontier exploration drilling.

The outcome has been a sudden rush of long-term contracts which have enabled Smedvig to plan three newbuild units - a fifth-generation semi and two drillships for ultra deepwater work. Odfjell, too, is in negotiations for the long-term contract which will enable it to complete construction of its half-built Bingo 8000 semisubmersible.

Renewed exploration

According to the Norwegian Petroleum Directorate (NPD), 1997 will be an exciting year for exploration, not least with the first deep-water wells off mid Norway being drilled. BP is set to lead the way, spudding a well this spring.

Altogether 35-40 exploration and appraisal wells will be drilled this year. In 1996, when 22 wildcats were completed or suspended, 10 discoveries were made, containing an estimated 380-700 MMboe, of which about 60% is oil.

Last year's count does not include the most exciting current finds, Saga's Lavrans and Kristin gas condensate structures off mid Norway. Lavrans was estimated to hold some 600 MMboe before the latest appraisal was spudded in January. In mid March the Kristin discovery well was about to be tested - the field appears to be of a similar size to Lavrans.

Barents renewal

Fresh licenses are also about to be issued for Barents Sea acreage, where previous exploration efforts had ground to a halt. There is optimism that this time round, with the benefit of easier terms, a collective approach and state-of-the-art technology, Norway!s northern frontier will be persuaded to yield up its hydrocarbon secrets.

The biennial re-assessment of recoverable resources by the NPD has led to a 16% increase to a total of 12.5 billion cu metres of oil equivalent, made up of 6.5 bcm of oil and 6.0 bcmoe of gas. However, the bulk of this increase is attributed to improved recovery from discovered fields, and the estimate of undiscovered resources has been raised only marginally to 3.5 bcmoe.

With 13 fields currently approved for development, and a couple of dozen others preparing to seek approval, production is expected to continue rising for some time yet. It is likely to remain well above 3 MMb/d well into the 21st century. This year has already seen Saga's Vigdis field come on stream nearly six months early and more than 10% under budget.

With supplies from the giant Troll gas field now flowing, gas production is set to more or less double by the early years of the next century.

Production will be further boosted by the start-up later this year of Esso's Balder, Norsk Hydro's Njord, Statoil!s Norne, and Saga's Tordis East fields.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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