ONS 2018: Equinor makes big exploration commitment offshore Norway

Equinor’s current activity offshore Norway is an all-time high for the company, said Arne Sigve Nylund, executive vice president for Development and Production Norway today at ONS.

Offshore staff

STAVANGER, NorwayEquinor’s current activity offshore Norway is an all-time high for the company, said Arne Sigve Nylund, executive vice president for Development and Production Norway today at ONS.

Sector-wide, optimism is back, he added. “We are on track to deliver to the Norwegian continental shelf [NCS] what we committed to in 2015. Our efficiency and overall rate of recovery has improved, our costs are down, and we are confident of maintaining production at our current level through 2030.

“But the industry also needs to renew and transform the NCS – for the period beyond 2030, there is a need to take concrete steps to ensure a high level of activity for the following decades.”

Nylund said the shelf could now be considered mature, after nearly five decades of production, but insisted that for Equinor, it still offers great potential.

“However, the new reserves we are finding are in smaller volumes and can be harder to unlock and are also more challenging to produce. Gaining access to new areas for exploration is therefore essential to future value creation.”

The Norwegian industry must also sustain its efforts to reduce CO2 emissions while at the same time delivering profitable oil and gas, he suggested.

After 2022, when Johan Sverdrup phases 1 and 2 and Johan Castberg in the Barents Sea are onstream, project activity looks set to drop, he warned, “unless we see more discoveries from our legacy assets.”

Over the next two decades, Equinor plans to drill up to 3,000 new wells offshore Norway, Nylund said, many from its existing field facilities, which would be as many as the company has drilled over the past 56 years.

At the same time, the company continues to pursue ways of further improving recovery from its producing Norwegian fields, he said.

One ongoing program involves looking at ways to prolong the lifespan of more than 20 installations. Originally, the Oseberg field center in the North Sea had been due to shut down in 2022 – now Equinor aims to keep operations going through 2040, with 2,000 people employed offshore and onshore for the development.

The company is also looking to support the Gullfaks and Snorre field centers with electricity from offshore wind turbines, and to produce hydrogen from natural gas from offshore fields.

“And we will invest NKr1-2 billion [$120-240 million] in digitalization to improve safety and production and to better support our employees in their operations,” he concluded.

Tim Dodson, Equinor’s executive vice president for exploration, said over the coming years one of the company’s priorities for the NCS would be to replenish resources for existing gas supply projects via the drill bit, as well as proving reserves for new development projects.

This would entail around 20-30 exploration wells annually over the coming years.

“But exploration on the NCS is different now,” he cautioned. “The biggest fields were found mostly in the 1980s and 1990s, and the average size of discoveries has fallen as the basin has matured – so most of the new fields will be developed through existing infrastructure.”

In total, Equinor has the same volume of prospects offshore Norway at present as it did 10 years ago, but today’s prospects are typically much smaller, Dodson said.

In order to find larger fields on the shelf, the company will need to approach exploration differently, he added – that means taking a chance with certain frontier-type wells where the risks are higher, but the size of the potential find is also greater.

“In this phase of the NCS’ life, we have to spend money on testing game-changing opportunities.” These are typically in stratigraphic traps.

Leveraging digitalization should aid the process, he said, helping to speed up exploration, reducing a prospect’s geological uncertainty. “What took years to analyze before can now be done in days.”

Currently Equinor is drilling an appraisal well on last year’sCape Vulture discovery in the Norwegian Sea. A side track updip of the discovery has been completed which has confirmed reservoir thickness, and drilling will next continue downdip to assess reserves potential. So far, the results look encouraging, Dodson said.


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