OFFSHORE EUROPE
Mixed prospects for Norway, Denmark
Investments offshore Norway, excluding exploration, soared by NOK16 billion last year to a near-record NOK83 billion, according to the Norwegian Petroleum Directorate. NPD predicts a slightly lower total in 2006, with field expenditure dropping markedly next year onwards as the Ormen Lange and Snohvit projects near completion.
However, the Energy Ministry also approved plans last year for 16 new field developments. And during 2006, NPD expects 10 further schemes to go forward, with potential re-developments also of shut-in fields such as Froey and Yme.
Out of this year’s predicted total spend of NOK81 billion, NPD believes 19% will be directed at modifying existing production facilities, 20% at building new ones, 43% at production drilling, and 18% at offshore pipelines and associated onshore plant.
Operating costs in 2005, excluding CO2 taxes and tariffs, amounted to more than NOK31 billion. This level should rise to around NOK34-37 billion over the next few years.
As for exploration, NPD predicts an outlay of NOK12 billion across the shelf in 2005. The Norwegian sector was relatively quiet last year, with only 12 new well starts. However, the success rate was high, with three discoveries in the Norwegian Sea, and three in the North Sea.
The Danish Energy Authority has also issued an update on activity offshore Denmark. This year, DEA predicts exploration investments of DKK500 million, up from DKK300 million in 2005, due largely to inflated rig rates.
However, interest in the Danish North Sea is rising, with 20 oil companies applying for acreage last November under the country’s latest licensing round, including several newcomers. Bidders included several little-known UK-based independents, and various gas-focussed, mid-size companies led by Wintershall and Gaz de France.
Denmark needs a stimulus, with DEA forecasting a slide in oil production from 22.6 MMcm last year to 19.3 MMcm in 2009. Over the same period, gas output should decline more slowly, to just over 9 MMcm.
Statoil probes Faroese basalt
Statoil aims to resume drilling off the Faroe Islands this summer, with a well on a sub-basalt prospect in license 006. The semisubmersibleStena Don will test Brugdan, a large anticlinal structure, in a location farther north than all four wells drilled hitherto in Faroese waters.
Gregory Hines, VP of Statoil’s E&P business area in Europe, said that Brugdan’s setting, beneath thick sections of volcanic rock, presented a stiff challenge to geologists. The nearest discovery is Chevron’s Rosebank, 70 km to the east, off the Shetland Islands. Here the operator is firming up plans for a multi-well appraisal program this spring, which would also probe the underlying Lochnagar structure.
In another high-risk exploration region, the Barents Sea Hammerfest Basin, NPD has upgraded its estimate of reserves on Eni’s Goliat discovery to 250 MMboe, comprising 75% oil and 25% gas. This follows a recent appraisal well on the field’s southern flank, drilled by the harsh environment semisubEirik Raude. Another positive was that hydrocarbons were found in a previously untested, deeper-lying formation. More drilling is planned on the license later this year.
Statoil has engaged the same rig for a well on the Uranus prospect in Barents block 7227/11, 120 km from the coast, not far from a small discovery. Drilling got underway mid-January, with a planned total depth of 4,000 m.
Total takes on Victoria
Total aims to become operator of Victoria, a potentially large high-pressure, high-temperature gas field in the Norwegian Sea. Under a proposed share swap plus cash arrangement, current operator ExxonMobil would cede its 30% interest in the field and surrounding license PL211 to Total, in return gaining 6.29% of another Norwegian Sea license. This acreage contains Tyrihans, an oil and gas field under development through Statoil’s Kristin facilities.
Victoria, formerly known as Belladonna, was discovered in 2000, but the harsh reservoir conditions rendered a planned well test at the time unworkable. The nearest production center is Aasgard, to the southwest.
In the UK sector of the North Sea, Total has brought onstream its Forvie North gas-condensate field, nine months after receiving development sanction. This field, also discovered in 2000, has been tied back to the Alwyn North platform via a 33-in., pipe-in-pipe flowline system, with Forvie’s subsea production equipment controlled from the Dunbar platform 17 km via an umbilical link.
Among the latest UK development schemes, Maersk has followed previous operator Kerr-McGee’s plan for re-developing the decommissioned Donan oilfield. Donan, previously produced by BP through the floaterSeillean(since re-deployed to Brazil), has been re-named Dumbarton. Assuming UK government approval, Maersk will transfer the FPSOGlobal Producer IIfrom Kerr-McGee’s under-performing Leadon field to Dumbarton, following modifications. Maersk is looking for at least 10 years production from Dumbarton, bolstered by satellite tie-ins. Leadon itself may be re-developed as a subsea project.
In the southern gas basin, ATP Oil & Gas has bought ConocoPhillips’ share of the undeveloped Venture field, giving it outright ownership. ATP is keen to achieve first gas by mid-2007, by installing a production platform linked by a pipeline to another host facility.
Statoil contracts lay barges
Statoil has contracted Stolt Offshore to lay two large diameter pipelines next summer in the Norwegian Sea, between the Tyrihans oil and gas field and the Kristin platform. The contract, valued at over NOK 550 million, covers one line for the Tyrihans wellstream and one for gas injection, the latter supplied from the Aasgard B platform. Both platforms are around 45 km from the Tyrihans export point.
The production line will comprise an outer carbon pipe and an inner stainless steel pipe, a first for Statoil. Laying will involve parallel installation of cables for direct electric heating and mechanical protection. The gas injection line will be made of carbon steel. Tyrihans’ reserves are estimated at 182 MMbbl of oil/condensate and 34.8 bcm of rich gas.
Statoil sets 2006 drilling plans
Statoil expects to participate in 15-20 wells across the Norwegian shelf in 2006, half of them as operator.
“We have secured rig capacity so that we can increase drilling activity,” says Tim Dodson, senior VP for NCS Exploration, adding that Statoil still needs constant access to new exploration acreage to maintain a high level of activity.
Last year, the company was operator or partner in 13 completed wells offshore Norway, some as exploration extensions. Hydrocarbons were proven in nine of the wells, mainly in the North Sea. Due to increased activity, Statoil also recruited around 100 exploration personnel.•