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Location of the Ormen Lange discovery relative to major Norwegian fields in production or under development. [13,978 bytes] Daily production of oil, condensate and NGLs off Norway could be close to 4 million bbl in 1999, according to analysts Arthur Andersen. Of the new fields scheduled to come onstream by that date, Åsgard, Jotun and Varg will be the main contributors.

Dec 1st, 1997

Jeremy Beckman
London

Norway's coalition throws down gauntlet

Daily production of oil, condensate and NGLs off Norway could be close to 4 million bbl in 1999, according to analysts Arthur Andersen. Of the new fields scheduled to come onstream by that date, Åsgard, Jotun and Varg will be the main contributors.

Norway's new coalition government, however, wants to restrain production in line with its environmental goals. Measures announced by the new energy minister Marit Arnstad include reverting to a queuing system for prospective field developments. That procedure was last enacted in the mid-1980s as a way of underpinning sagging oil prices.

Exploration drilling could also be curtailed. Recent plans to introduce an auction system for offshore licences on US lines have been shelved, and the 16th Norwegian licensing round has been put back to after 2000. The ban on rigs in the southern Skaggerak sector adjoining Swedish waters will also remain in force.

New gas contracts should not impinge Norway's political freedom, the coalition insists, nor should gas be exploited for environmentally unfriendly end-uses. Greater control of energy resources should pass to the government, and Statoil should remain wholly state owned.

Response from the industry to date has been low-key - widespread heavy sweating has not been noted. The reality is that Norway's high tax rates will have generated a national petroleum fund close on NKr200 billion by next year - money set aside for investing in the nation's future. And the gas tap cannot be switched on and off. Norway has long-term supply commitments to utilities across Europe and would be foolish to wreck its image as a reliable supplier. Furthermore, there seems little sense in irking the companies currently plowing billions of kroner into new gas trunklines.

As for Statoil, self-restraint has not been evident. This month the company is filing a plan to develop the Huldra light oil and gas field through a 10,000-ton unmanned wellhead platform, exporting liquids to Veslefrikk facilities for processing and gas to the Troll plant at Kollsnes.

Statoil is also considering joint development of its Glitne and Theta West oilfields north of the Sleipner complex. Theta West's size is unclear, but Glitne contains 50-60 million bbl. Two unmanned platforms, a processing platform or subsea wells tied back to Sleipner A are among the possibilities for the PDO, due out next fall.

Finally, appraisal of the Midgard gas condensate field's Gamma segment has confirmed the presence of 12 meter thick oil layers.

Gas-rich Moere Basin province confirmed

Norsk Hydro's recent 6305/5-1 exploration well in the Moere Basin could be Norway's largest gas discovery since Troll East in the early 1980s. However, due to the backlog in gas developments in the Norwegian sector, it may not produce for another two decades.

The acreage, situated in the Ormen Lange area in 900 meters of water, was secured last February under Norway's 15th licensing round. The semisubmersible Ocean Alliance found methane-rich gas in early tertiary sandstones, drilling to a TD of 3,030 meters in upper Cretaceous rock. Early reserves estimates suggest 3.5 tcf, with upside potential for 10 tcf. Reservoir characteristics appear good, with no gas/water contact encountered in the section explored.

Ormen Lange may extend as a structure into BP acreage to the south and a neighboring open block where, according to analysts Wood Mackenzie, a seismic reflector has been identified, expected to be a gas-liquid contact. Potentially, the reservoir base here could contain an oil rim. BP is expected to probe in 1998.

Statoil may also have a major new discovery with a recent well in the Lunde formation east of Gullfaks South. The well, in Triassic sands 3,000 meters below the seabed, hit a vertical oil/gas column measuring almost 700 meters - a record for this part of the North Sea.

In the UK central North Sea, Shell and Phillips have announced a second discovery from their jointly-funded campaign in blocks 22/28 and 22/23. Wireline logs identified a potentially commercial formation in a Tertiary reservoir - further tests are planned.

Danish oil output nudges upwards

Oil production from the DUC fields offshore Denmark reached a new high of 245,000 b/d in September. Phil Cram of Texaco, a 15% partner of operator Maersk, attributed the rise to early commissioning of the Harald Field and productive development drilling on the Dan Field. Harald came onstream officially in October at around 20,000 b/d. Main facilities are a process platform bridged linked to an accommodation platform.

Maersk has since moved on to several smaller new developments. The first is Adda, containing 6 million bbl and 30 bcf of gas. Jack-up Transocean Shelf Explorer I is drilling this as a dual-purpose appraisal well/subsea tieback to the Tyra East facilities 10 km away. Next in line is Lulita, likely to be tapped through a long-reach producer well drilled from Harald.

For the second phase of the Kraka development, Maersk plans to pipe lift-gas to the field's wellhead platform through a 9-km, 6-in. line due to be laid from the Dan F-F platform next year by McDermott-ETPM's Norlift. Then Maersk may switch its attention to the forgotten Elly and Igor fields, both now seen as candidates for minimum facilities platforms.

FPSOs provide fast track to stress

FPSOs are proving to be a mixed blessing in the North Sea. Project contractors like the idea of quickfire conversions and fit-outs, but the tight timescales set by some operators are proving impractical. Cost overruns ensue, leading increasingly to bitterness and litigation.

  • Esso Norge, for instance, recently terminated its operating contract with Smedvig for the Balder Field production unit, currently being outfitted by UIE at Clydebank, UK - the hull was built at KFELS, Singapore. After receiving the vessel this March, Esso declared dissatisfaction at aspects of Smedvig's management of the project to date, citing defects, for instance, in the FPU's piping and electrical systems (hence the extra current outfitting by UIE). Smedvig countered that Esso incorporated too many late changes in the vessel's design. Whoever is right, production is already nine months behind schedule.
  • Shell and Amerada Hess also had their differences over an oilfield discovery which stretched across two of their blocks in the central UK North Sea. Shell favored a subsea tieback to its Gannet complex, while Amerada fancied adding to its stock of floaters. So reportedly did Texaco, which needed a production hub for its West Guillemot accumulation 15 km away in Quadrant 21.

Shell was the one to give ground. The main field has been renamed Bittern, and an FPSO will be ordered, subject to government approval. But the operating terms reflect the compromises involved, with no outright leader. Instead, there are joint teams, with Amerada Hess the designated "duty holder" for the FPSO, Shell taking the lead in subsurface management of Bittern and Texaco doing the same for West Guillemot.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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