NORWAY: Norsk Agip outpost drilling to define Goliath development

Reviewing development options

Th 6104osgoli
Th 6104osgoli
Map showing location of Norsk Agip's Barents Sea licenses and the two wells drilled last year. The Goliath well is 7122/7-1.
Click here to enlarge image

Norsk Agip's recent discovery of oil in the Barents Sea presents the company with welcome challenges and opportunities. "The Goliath find is the most important for the company as operator to date in Norway," says Deputy Managing Director Sverre Bore. "But we don't know yet to what extent it is commercial."

The discovery last September was made by exploration well 7122/7-1, drilled by semisubmersible Transocean Arctic in 381 meters water depth. Partners in the license are Agip (25%), Phillips (25%), Enterprise (15%), Fortum (15%), and the State's Direct Financial Interest (20%). Goliath lies some 85 km north of Hammerfest on Norway's northern coast and about 50 km southeast of Statoil's Sn hvit Field.

"The discovery of Goliath was not such a surprise to us, as we had worked on the prospect for a long time," says Bore. Agip has not so far said anything about how big Goliath might be, beyond the fact that it is not a large field. "We want to get a better grip on reserves first," says Bore. "We hope that one more well will be sufficient."

The conditions attached to Agip's license limit the drilling window in this environmentally sensitive area to between September 1 and January 15. If a rig can be fixed, the company will drill an appraisal well later this year, but with only two winterized rigs currently operating in Norway, it is by no means certain this will happen.

Development

Meanwhile, a range of development scenarios is being screened. Given the water depth, there are two main concepts under review: subsea facilities tied to a floater or directly to shore. If a floater is chosen, a monohull with storage would seem more cost-effective than a semisubmersible platform requiring separate storage.

Goliath is probably not large enough to justify outright ownership of the unit, so the partners would likely lease one. Additional costs would be incurred in adapting the unit for work in freezing temperatures, but these could be limited if provision for the modifications were provided from the beginning.

If, however, output is piped directly to shore, Melk Island, which has been regulated for industrial activities, would probably be the chosen site. This is where Statoil will build the Sn hvit LNG plant if that project also goes ahead. "If everything goes very smoothly, and without any complications, we could be onstream by the end of 2004," Bore says. One welcome complication would be the discovery of further oil reserves in the area. This would open up the possibility of a coordinated development, with economic benefits accruing to the various license groups.

Agip also scored with its second well in the Barents last year - 7019/1-1. This produced a small gas find that is uncommercial but geologically interesting, Bore says. Further prospects have been identified on the license, which the partners - Agip (35%), Enterprise (25%), Fortum (15%), and SDFI (25%) - would like to investigate. However, there are no plans for a further well at present.

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