Jeremy Beckman • London
Norway has offered 50 new production licenses to 39 companies under the country’s 2010 Awards in Pre-Defined Areas licensing round. The APA scheme focuses mainly on acreage in mature basins, but there were some exceptions this time round. Norwegian independent Rocksource, for instance, gained operatorship of three stratigraphic concessions in the Stord basin in the central Norwegian North Sea, and of a license northeast of Norske Shell’s Draugen field in the Norwegian Sea.
As always, Statoil, the sector’s dominant player, was the biggest winner with interests in 11 permits, eight as operator. Among the other Norwegian companies, Det norske oljeselskap picked up stakes in eight licenses, three as operator. Six of these concessions are in the North Sea and include an expansion of the Dovregubben exploration area. Spring Energy won shares in five licenses, including PL591 covering blocks 6507/8, 9, and 11 in the Norwegian Sea, in an area where numerous Mid-Jurassic Fangst group play prospects have been mapped.
Of the more active foreign-owned contingent, Wintershall secured 10 production licenses, six as operator. Much of the acreage is close to the company’s recent Beta, Grosbeak, and Maria discoveries. And Lundin Petroleum gained five operatorships in the North Sea, two in the Greater Luno Area, where the company expects to issue a development plan later this year. As for the majors, the sole new operatorship went to Total in a remote area of the Norwegian Sea, southwest of Norske Shell’s Linnorm gas discovery.
Gullfaks C to host latest Statoil tieback
Statoil has submitted a development plan for the Visund South project in the North Sea, comprising the Pan and Pandora oil and gas discoveries, 10 km (6.2 mi) from both the Gullfaks C and Visund A platforms in 290 m (951 ft) water depth. The combined reserves are 67 MMboe.
Due to concerns over a potential pressure drop in the reservoirs, Statoil is keen to push development forward. The $970-million scheme involves installation of a four-slot subsea template, with three wells drilled initially, all tied back to Gullfaks C for processing. Assuming approval, production could start in summer 2012.
Recently, Statoil held follow-up talks with Petroleum Safety Authority Norway to present its findings on a well control incident last May at Gullfaks C. Pressure build-up in the well, caused by leakage in a casing almost resulted in a blow-out. In response, Statoil decided to systematically survey all the wells throughout the main Gullfaks field.
Subsequent inspections during the fall suggested a pressure build-up in certain areas, chiefly in wells used for pressure support. This led to shut-in of 20 wells, mainly water injectors, followed by a further 30 well closures to maintain the pressure balance in the field. Statoil now is working to bring as many of these wells back on line as possible.
Analysis indicates a connection between pressure build-up in the Shetland and Lista rock formations and the positions of the wells presenting most risk. However, Statoil believes that the overlying sands in the Hordaland formation hold sufficient capacity to compensate for any weakness below should a fracture occur in the Shetland formation. The company says it has identified no leaks from the reservoir as a result of its operations on Gullfaks, although there are leaks as a result of natural pockmarks on the field.
UK revival set to continue
Capital investment on the UK shelf could soar to $12.3 billion this year, up from $7 billion in 2010, according to analysts Wood Mackenzie. This, the consultants add, should instigate a temporary halt to the long-term production decline across the sector. And higher oil prices should, in theory, lift exploration and appraisal drilling activity.
Last year, analysts say, there was an increase in the number of UK field development submissions, and 37 exploration wells were spudded – up 28% on the figure for 2009, although some way short of the 56 wells spud during 2008. However, last year’s wells only yielded 233 MMboe of new reserves, down 67 MMboe on the previous total.
Another study, this one by Hannon Westwood, has identified 90 economic discoveries across the UK shelf that could be brought onstream within the next five years, delivering 2.6 Bboe in new production and $44 billion in petroleum taxes to the UK treasury. But under current market conditions the required capex of around $33 billion could be difficult to raise, unless the government intervened by introducing new tax allowances.
Storage scheme enters exploration phase
Results from a first-phase concept study suggest a planned gas storage facility off eastern Ireland is both economically and technically feasible. UK engineering group AMEC performed the study for the Ulysses scheme in the Kish Bank basin offshore Dublin for Providence Resources subsidiary EIRGAS. The scope includes capacity modelling, infrastructural integration, and gas sourcing for the proposed offshore cavern natural gas storage facility.
Providence has examined various scenarios with a range of capacity, off-take export rates, and capital expenditure. The company now intends to acquire technical data relating to subsurface geology, which would involve drilling a well into the nearby Dalkey Island exploration prospect. If Ulysses goes forward, it could provide around 50% of Ireland’s gas storage capacity, the company claims.
Dual-oil success for DONG
DONG Energy is driving current exploration activity in the Danish North Sea. In December the company announced a new oil discovery, Solsort, in pre-chalk sandstones. This was followed in January by Sara, which flowed oil from Palaeocene-age sandstone in the westernmost reaches of the Danish sector.
Recently, DONG applied for a new license, one next to its existing 4/95 permit, over an area where there has been little exploration in the past few years. Denmark’s Minister for Climate and Energy is considering this application, but has awarded a new concession, license 1/11, to Norwegian company Noreco covering an area directly west of Noreco’s 2/05 license. Noreco plans to drill the Luna prospect on the new acreage later this year.
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