March 1, 2006
Statoil set for steep gas growth

Jeremy Beckman • London


Statoil set for steep gas growth

Last year was a record-breaker for Statoil in terms of production and field activity, according to CEO Helge Lund. The company’s global output rose to 1.2 MMboe/d, due in large part to start-up of fields offshore Angola and Azerbaijan. In Norway, the picture was mixed, with total liquids produced down 22,000 b/d, although this was offset by higher gas offtake.

During a presentation in London recently, Lund added that the company had sanctioned 12 Norwegian projects over the past year, and had completed 14 new exploratory wells across the shelf in 2005. Strong showings from these and international wells boosted Statoil’s reserves replacement ratio to 102%, not taking into account a recent re-evaluation of Kvitebjorn in the North Sea, which came onstream in 2004. New data on the reservoir suggests the field’s gas and liquids reserves could be 50% higher than previous estimates, equivalent to an extra 29 bcm and 70 MMbbl.

Lund expects the overall blip in liquids production to flatten out in 2007, when new developments Volve and Skinfaks/Rimfaks come online. In the longer term, Statoil is looking to inject carbon dioxide from the Sleipner fields 10 km into the Volve reservoir to boost oil recovery. If sanctioned, the project would be a world first.

Stanislav Yudin installing the G17d processing platform topsides.
Click here to enlarge image

He highlighted three other Statoil projects as groundbreakers. Kristin, a new producer in the Norwegian Sea, is employing materials technology transferred from the space industry to cope with the reservoir’s extreme temperatures and pressures (170°C, 911 bar). On Tyrihans, a newly approved subsea development via the Kristin platform, Statoil has commissioned a record-length (43-km) electrically heated pipeline and a seabed water injection system. Finally, Tordis IOR will involve the world’s first full-scale subsea separation package.

From 2007, Statoil’s gas graph profile should veer north-east following start-up of Ormen Lange, Snøhvit, and Statfjord late-life, producing cumulatively 133,000 boe/d at peak. Work on Snohvit’s artificial island LNG plant was recently suspended for two weeks when near-hurricane conditions in the Barents Sea forced a total evacuation.

As for exploration, the company expects to participate in 15-20 Norwegian wells this year. “We’re also actively seeking new acreage,” Lund added. Statoil gained 10 operatorships in Norway’s latest pre-defined areas licensing round.

Gaz de France unfurls four fields

Gaz de France has achieved the unusual feat of bringing four gas fields onstream at the same time, doubling its production capacity in The Netherlands. The $358-million project, which also took in reserves in block K2, involved construction of two new platforms, re-use of two redundant sets of topsides, and a rare (for the Dutch sector) subsea completion.

GdF is one of the most active small field developers in Europe. It entered The Netherlands in 2000, acquiring a large spread of mature field interests from Placid, now operated by GdF’s Dutch subsidiary ProNed. Following a series of discoveries and further transactions in the G and K quadrants, it opted for a simultaneous, multi-field development late in 2003.

A year later, it agreed to ATP’s request to connect the latter’s L6d field to an existing production platform on block G17d, which would itself be bridge-linked to a new processing/compressor installation.

Most of the work was issued to Dutch contractors. Following detail design by Iv-Oil and Gas, HSM Steel Structures in Schiedam fabricated topsides for the new G17d-AP and K2b-A platforms, with Heerema in Vlissingen supplying both jackets. These were installed on the fields last May by the Seaway heavy lifting crane vesselStanislav Yudin.

For the gas fields in blocks G14 and G16a, ProNed chose to refurbish topsides from two redundant well protector platforms in the K quadrant. These were removed by the same vessel and transported to Keppel Verolme in Rotterdam for renovation. NAMI in Ridderkerk built the two new jackets -Stanislav Yudinmanaged these installations in stages last summer. ProNed then put in a subsea completion on G17, with OMF Services building the well protection frame. Allseas’LorelayandCalamity Janevessels handled respectively pipelay and trenching, with Noordhoek Offshore connecting the pipes to the platform risers. Noble Drilling was responsible for the development well program.

Total reserves from the five ProNed-operated fields are 18 bcm, with a maximum production capacity of 7.2 MMcm/d combined.

Marathon steps in at Seven Heads

Ramco Energy’s troubles with the Seven Heads gas field off southern Ireland are finally over. Marathon has agreed to take outright control of the project, which had stalled following serious water breakthrough in the wells.

The five-well subsea development, linked by a pipeline to Marathon’s Kinsale Head platform complex, ran into difficulties soon after start-up.

Ramco will use the $10 million cash transaction to pay off its creditors, and will now pursue openings elsewhere, including a possible well off Ireland’s northwest coast this summer.

Ramco’s partner and fellow independent, Island Oil and Gas, remains committed to the surrounding Celtic Sea play, and is lining up a test this summer of a potential extension of Seven Heads, using the drilling rigPetrolia. The planned location lies west of the 48/24 well, which intersected some of the field’s best-producing gas sands.

Island may use the same rig to drill another well on the Old Head of Kinsale prospect in licensing option 03/4. It will then move north to drill the shallow water Inishbeg prospect for Island in a frontier exploration license in the Donegal basin.

Next year, the company hopes to mount a probe of the potentially giant deepwater structure Killal in western Ireland’s Rockall basin. Island has also applied for an exploration permit in the Aquitaine basin offshore southwest France. Canada’s Vermilion, a French onshore specialist, is the rival bidder.

Also in Ireland’s corner of the Atlantic, Dublin-based Providence Resources has signed a farm-out agreement with ExxonMobil concerning its Dunquin prospect license, which extends over 700 sq km in the Porcupine basin. ExxonMobil would be entitled to 80% of Dunquin, subject to approval from Ireland’s government. In return, it would finance an upcoming 2D long offset seismic survey over the acreage, and up to two resultant exploration wells.