Acquire, produce, explore - in that order - is Talisman’s approach to building up its offshore portfolio. The policy, which has served it well on the UK shelf in particular, is now being applied in Norway.
Talisman entered the Norwegian sector in 2003 through the acquisition of BP’s Gyda field. Last year it took over Norwegian independent Pertra, and in December it also acquired Paladin’s Norwegian assets. Combined with successful participation in recent licensing rounds, the company now has interests in nearly 40 licenses, which embrace numerous producing fields, fields at different stages of development and some attractive exploration prospects.
Talisman Energy Norge is led by Managing Director John Vemmestad. In addition to operation of the producing Gyda and Varg fields, the company is also a partner on Veslefrikk and Brage. On Gyda it has kept the drilling rig working continuously since it took over, drilling in-fill wells and performing workovers. It has also drilled six new wells.
The company is well-known for buying mature assets and finding ways to improve recovery and extend field life, at times with dramatic results. But the asset must not be too far into the tail-end phase, says External Affairs Manager Andreas Middelthon - it must have enough residual value to justify investment in measures such as infill drilling.
He welcomes Norway’s emerging market in secondary licenses. The cradle-to-grave thinking which characterized North Sea development in the early days leaves oil in the ground. “We think it’s good for the industry, and for the government, which gains extra taxes, if we aim to produce all the economic oil,” he says. “We have statistics which show that a change of operator leads to a significant increase in offshore investment.”
Via the Paladin portfolio Talisman has become the operator of Blane, a field straddling the Norwegian/UK median line. Due on- stream early next year, Blane is being developed as a subsea tieback to BP’s Ula field on the Norwegian side. During the production phase Talisman in Norway will have responsibility for working with BP.
Another of the former Paladin assets is Yme, a field originally developed by Statoil in the late 1990s. Before it was taken over, Paladin established a sufficient volume of commercial reserves to justify redevelopment. Talisman will now carry out its own studies to ensure an efficient development, Middelthon says. A plan for operation and development could be submitted later in the year.
Paladin drilled a dry exploration well late last year on Aimee, a prospect located on the same license as Yme. But there are other sizeable structures in the area which the company is investigating, according to Mike Trees, exploration and geoscience manager. Drilling plans will be drawn up once a recently acquired 3D seismic survey over these prospects has been processed and interpreted.
From Pertra Talisman has inherited the Varg South development. In February an appraisal well was spudded by jackupMaersk Giantto provide better reservoir understanding. When development goes ahead, the well will be recompleted as a producer. The base case for Varg South is a cross-border tieback to BG’s Armada platform in the UK sector.
Near-platform targets
Exploration in Norway has been stagnant in the past decade, Trees says. Talisman however intends to be an active explorer, and, with strong encouragement from top management in Calgary, plans to drill up to four operated wells a year. In the shallower waters of the southern North Sea, where much of its acreage is located, its drilling needs will be covered byMaersk Giant, on which it recently renewed its contract to mid-2009.
One objective is to find additional reserves close to existing infrastructure. In the Gyda area, for example, it plans appraisals this year on Krabbe and also on Mime, a field produced by Norsk Hydro in the early 1990s. Next year an exploration well is scheduled for the undrilled Mimming prospect. These are all potential subsea tiebacks to Gyda. Additional reserves have also been identified in Gyda South, a satellite already in production through an extended-reach well from Gyda.
But some of the acreage is in relatively virgin territory far from infrastructure. This is the case, for example, of blocks 17/2, 3, 5 & 6 in the Åsta Basin.
The Paladin portfolio also brought Talisman its first asset in the Danish sector, a stake in Siri. Here too it is seeking to grow. It has applied for block 5604/18 in the current 6th Danish licensing round, which lies adjacent to Norwegian block 3/7 which is licensed to the company. Block 3/7 contains the Marsvin prospect on which an exploration well is planned for 2007.
Exploration success will contribute to the Talisman’s future production in Norway, where, in less than 30 months, it has already increased its net production from 5,000 b/d to 50,000 b/d. It aims to keep growing, Middelthon says, repeating its successful development in the UK, where it is now the second-largest operator of facilities, with production of around 180,000 boe/d in 4Q 2005.•
