Offshore Europe

Aug. 1, 1996
Jeremy Beckman London Location of the Faeroese Lopra-1 well in relation to possible offshore licensing zones. [22173 bytes] Norway's parliament (Storting) has approved the development plan for the Aasgard complex of fields in Haltenbanken comprising Smorbukk, Smorbukk South and Midgard. Combined reserves are put at 770MM bbl of oil, 130MM bbl of NGLs and 8.2 tcf of gas. Phase 1, involving oil production through a monohull FPSO, should be onstream in August 1998, peaking at 234,000 b/d in
Jeremy Beckman

Aasgard finally rolls off the statutes

Norway's parliament (Storting) has approved the development plan for the Aasgard complex of fields in Haltenbanken comprising Smorbukk, Smorbukk South and Midgard. Combined reserves are put at 770MM bbl of oil, 130MM bbl of NGLs and 8.2 tcf of gas. Phase 1, involving oil production through a monohull FPSO, should be onstream in August 1998, peaking at 234,000 b/d in 2001. Oil will be offloaded to shuttle tankers.

A semisubmersible platform will be used for the gas production phase with a floating storage and offloading unit alongside. Wet gas should be flowing from spring 2000, building up to plateau production of 1,050 million cf/d of dry gas and 20,000 b/d NGLs in 2007. The overall development is priced at NKr33.4 billion, with a further NKr10.8 billion to be allocated for the gas export pipeline to Kaarstoe.

Both the production vessels will be stationed close to Smorbukk which will require the highest number of development wells: 22 producers and 16 gas injectors. In theory, 60 subsea well tiebacks could be needed, making this the world's largest subsea development. However, drilling advances will likely reduce that number.

Well completions will be handled by the newbuild DP SWATH vessel which will have a mass of intra-field flowlines to negotiate. Baker Hughes will manage well services for the first three years: reservoir conditions could be problematic, characterized by high pressures and temperatures, several layers on top of each other and ultra-low permeability in places.

The Storting has also approved a program of goals and strategies for the Snorre Field licence. These include improving the field's economics in relation to the revised PDO of 1994, and an evaluation of long-term depletion solutions.

Forgotten acreage set for revival

Industry and Energy Minister Tim Eggar is proposing competitive bidding for mature acreage in future UK licensing rounds. "Such bids would probably take the form of upfront payments," he said, "but might include enhanced license fees or royalty payments."

His aim would be to encourage oil companies to value these old blocks and carry out enthusiastic work programs to develop that value. Awards would not be made on the traditional lines of obligatory work programs. The new system could be applied to 20-30 blocks in the next North Sea round, with an initial license duration of just three to six years. Pre-qualification could start next spring.

Eggar is concerned at the number of `fallow blocks on the UK shelf "which have not seen the drill bit or seismic boat for several years". Yet these self-same license holders are often the first to bay for new swathes of frontier acreage.

Recently, the Ministry completed a review of 115 blocks identified as fallow for licenses awarded up to 1983. The review found that activity was planned on 72 of the blocks over the next 12 months; 14 more will be relinquished shortly; seven have no activity planned over the coming year. On 19 others, discoveries have been made but no developments are planned.

Consortium targets Faeroese structures

Deepening of the Faeroese well Lopra-1 on the island of Suderoy was due to start last month. The well was originally drilled for scientific purposes in 1981, but technical problems halted the exercise 2,200 meters down, ruling out penetration of the bottom of the basalt formation prevalent around the islands.

However, subsequent wellbore data suggests the base may be at most only 300 meters beyond the plugged point, with potential hydrocarbon-bearing structures underneath.

Nineteen oil companies are sharing the costs of the new well, expected to take 30-45 days, according to UK analysts Wood Mackenzie. The cost is estimated at DKr30 million. Danish state oil company DOPAS is coordinating the project. Results will strongly influence bidders in next year's designated first Faeroese offshore licensing round.

Norwegian-Canadian asset trading

Canada is becoming a force in the North Sea. Over the past year PanCanadian and Talisman Energy have been exploring acreage acquired in the UK and Dutch sectors. Talisman is thought to have assumed operatorship of the Ross oilfield from BP. Now Petro-Canada is forming an alliance with Norsk Hydro which would give it 9% and 7.5% respectively of the Veslefrikk and Njord Fields. It would also gain access to Hydro's expertise in technology and offshore field operation.

In return, Hydro would get a 5% working interest in Hibernia, 15% in Terra Nova and 30% of Petro-Canada's interests in the discovery area of Canada's Jeanne d'Arc Basin. Hydro would pay up to $90 million towards capital costs of the two Newfoundland developments, but its stakes in these fields would be equivalent to 94MM bbl. The deal could be concluded before year-end.

This is a coup out of the blue for Hydro, which has lagged its Norwegian competitors in world upstream markets. While Saga and Statoil have pursued projects in Venezuela, the Caspian, West Africa, and Asia, Hydro has been known overseas mainly for fertilizers and light metals.

Another North Sea transaction is in prospect now that Santa Fe Exploration (UK) has been put up for sale by parent Kuwait Petroleum Corp. Since 1972, Santa Fe had accumulated interests in over 40 UK offshore blocks and 25 blocks off Ireland. Its reserves had quadrupled over the past decade, with average daily production totaling 60,000 boe. Its key new UK development interests are Britannia and Durward/ Dauntless.

Troll gas on tap and on offer

Production from the Troll gasfield could more than double to 50 bcm/yr if new markets are found, according to a reported statement by Jakob Bleie, Statoil's VP for Troll operations at the recent project inauguration. Statoil assumed operatorship from development phase operator Norske Shell. Current sales estimates suggest only half Troll's known reserves will be needed to sustain flow from the field at 24 bcm over the next half-century.

Troll gas and condensate heads to Kollsnes. At Kaarstoe, however, Norway's first LNG plant will soon be operational. Statoil has just signed a long-term agreement with Linde to seek more cost-effective technical solutions for on and offshore liquefaction plants, covering the whole process from storage to ship transport to regasification.

At another Statoil-operated complex, Gullfaks' oil reserves have been upgraded yet again, this time by 125MM bbl to 1,945MM bbl, and the new Gullfaks satellites should push the recoverable total to 2,210MM bbl. Recovery is being enhanced using horizontal and extended reach wells; new completion and sand control solutions; water-alternating gas injection; and cycling of gas injection with oil production.

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