Norwegian authorities press for joint development of North Sea fields

Norway’s Ministry of Petroleum and Energy has asked the licensees in the Luno and Draupne fields in the North Sea to come up with a unitized development solution.

Offshore staff

OSLO, Norway – Norway’s Ministry of Petroleum and Energy has asked the licensees in the Luno and Draupne fields in the North Sea to come up with a unitized development solution.

Lundin Norway operates license PL338 containing the Luno discovery, while Det norske oljeselskap operates PL001B that holds the Draupne field.

The two sets of partners had been keeping their options open on how to proceed with their respective projects, but Det norske said in May that a joint scheme had been shelved for cost and scheduling reasons. It had since been focussing on another joint development taking in Draupne and its nearby Hanz and West Cable discoveries, thought to involve an FPSO and a wellhead platform.

However, the distance between Draupne and Luno is only 8 km (5 mi).

In the government’s view, a unitized solution would bring costs savings that would benefit both the licensees and society in Norway. According to Det norske, the Ministry has made the licensees aware that they cannot expect its approval for their respective plans for development and operation without these benefits being realized.

Lundin Norway’s parent company Lundin Petroleum claims that prior to receipt of the letter from the Ministry, it had already proposed a joint scheme to the Draupne licensees, and that it has been seeking to progress cooperative commercial arrangements.

It has completed its FEED for the 188 MMboe recoverable Luno development, comprising the Luno and Tellus discoveries, and has prepared a draft plan which includes the provision for a joint development with Draupne. This is ready for submission before year-end.

Lundin adds that it has secured rig capacity for the Luno development and is aiming for first oil in late 2015. The company’s partners in PL 338 are Wintershall and RWE Dea Norge.

Det norske expects to recover 143 MMboe from Draupne, where the other licensees are Statoil and Bayerngas.

Erik Haugane, CEO of Det norske, said a unitized development could make both projects more profitable and mitigate risk for all the licensees. His company would therefore initiate a constructive collaboration with Lundin Petroleum in order to speed up progress toward a PDO for a unitized development.

A joint program involving two different projects may be unprecedented on the Norwegian shelf.

10/07/2011

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