Offshore Europe

Further setback for Foinaven startup

Greenpeace's campaign to halt oil production west of Shetland has proven superfluous, with BP itself delaying proceedings. For the second time in a year, a drilling manifold on the Foinaven Field has had to be extracted from the seabed due to leaks, emanating this time from seals on the Cooper Cameron valves.

Seepage is thought to have occurred due to pressure on the seals in the 500-meter water depth. The latest leaks were detected early this year and dealt with through subsea intervention, but BP has decided to play safe by retrieving the manifold and five xmas trees for inspection onshore, rather than face further catcalls from Greenpeace over damage to the ecosystem.

A year ago, a manifold from the same drilling center had to be retrieved. The problem there stemmed from the cathodic protection system. The retrieved manifold has yet to be repositioned on the Foinaven 2 drilling center, as planned. Meantime, production from this flagship Atlantic Margin field continues to be delayed, with contractor Awilco paid $108,000/day for its idle FPSO.

Greenpeace has now switched its attack to Conoco, whose London gasoline retailing office was briefly occupied up to the rooftops last month. The uninvited guests were responding to Conoco's joint study with Texaco and Total of ways to collect and transport gas from their interests on the Atlantic Margin.

With no such infrastructure in place nearby, the Aurora project will examine the feasibility of building new subsea pipelines and gas landfall sites in the Shetlands, Orkney, or mainland Caithness, or tie-ins to trunk lines in the northern North Sea.

Gas supply plaintiffs gain upper hand

Sixty three oil and investment companies responded to Arthur Andersen's latest UK industry outlook survey. Nearly 60% saw long-term gas supply contract difficulties - one of the thornier topics broached - being resolved through negotiation. In fact, three settlements have just been concluded - two with the aid of the High Court in London, but only one involved a compromise.

Attempts to overturn contractual terms stemmed from a mounting glut in North Sea gas, depressing prices per therm sharply, just after supplies had been agreed at a costlier rate. In each case, the buyers tried to extricate themselves from their commitments by invoking technicalities, but the court ruled that a deal was a deal. So Total Gas Marketing was obliged to take its full allocations from Arco's Trent Field, and Enron had to pay sums withheld from the CATS pipeline owners since March 1995.

In a separate dispute with the J-Block partners, Enron had shunned supplies of associated gas from the Judy Field, thereby choking oil production through the new platform. However, Enron was finally persuaded to pay $440 million to the J-Block co-venturers in return for amendment of its long-term gas contract, and a lower fixed contract price in tune with current market conditions.

The wrangles did not deter the CATS team from opening a new gas processing plant on Teesside, England, linking central North Sea fields directly to domestic gas markets. Production from the ETAP Field complex next year will add a further 1,200 MMcf/d to the trunkline system, and there are now plans to build a second pipeline to Teesside, according to CATS manager Terry Hughes, depending on demand from North Sea field owners.

Excess supplies in the southern sector continues to be channeled to the Continent. Mobil has become the first non-equity holder to secure capacity in the new Interconnector pipeline from Bacton to Zeebrugge, which it will use to feed 80 MMcf/d over 15 years to Norsk Hydro Agri in The Netherlands. Centrica (British Gas) has clinched a seven year supply deal through the same line with Germany's Thyssengas.

Norway, Ireland open frontier tracts

Glitne, in Norwegian Block 15/5, could form the hub of a new develpment in the Sleipner area. [13,316 bytes] More frontier acreage has been awarded in the Barents Sea and Atlantic Margin. Norway's Ministry of Petroleum and Energy offered licenses to ten oil companies in seven licenses across the southern half of the Barents Sea, with plays in the west potentially trending with those in Norway's Voering and Moere Basins. Two operatorships went to Saga, with Agip, Elf, Mobil, Norsk Hydro, and Statoil gaining one each.

Exploration in these northerly waters to date has mainly yielded gas. According to Saga's regional manager in Harstad, Brynjulf Klove: "Oil accumulations have unfortunately proved so far to have leaked to the surface via faults, and the Barents Sea has been commercially disappointing." However, he added that "These awards give us a greater variety of exploration models". No wells are likely on the new tracts before 1999.

Saga also gained operatorship in the Irish Rockall Trough licensing round. Phillips came top with three, followed by Elf with two, with other awards to Shell, Statoil, Enterprise, and British Gas/Arco. Enthusiasm was high, due to a combination of advances in deepwater drilling technology and Ireland's attractive fiscal regime. One group bid a commitment well, even though this was not stipulated. A southern Porcupine Basin licensing round has since been announced for December 1998.

Statoil ponders niche developments

Statoil dominates current field development conjecture off Norway. A PDO for the Heidrun North discovery will be submitted shortly, with a view to a production start in summer 1999 via a subsea link to the Heidrun platform 10 km away. However, further appraisal drilling may be needed to clarify the extent of the accumulation.

Also under scrutiny is Glitne, an oil and gas discovery recorded by Norsk Hydro in 1995, but recently ceded to Statoil. Glitne could form the hub of a new development in the Sleipner area, depending on an upcoming appraisal well by the Byford Dolphin, which will also test oil potential of younger Tertiary sands. Success could spur a PDO early next year.

Statoil has also drafted a second phase PDO for the Gullfaks satellites now that they have been nominated by Norway's Gas Supply Committee for gas deliveries to mainland Europe from 1999. The plan also calls for two further seabed templates linked by flowlines to Gullfaks C, with some extra gas production through the Gullfaks Phase 1 subsea facilities.

In the UK sector, the FPSO Petrojarl I will linger longer than expected on Arco's Blenheim oilfield following the fast-tracking of last November's Bladon find in nearby block 16/2d. The 5.3-km single well tieback should generate first oil shortly, following installation of an extra riser on the vessel.

Unexpected watercut problems had more than halved production levels at Blenheim from 23,000 b/d in 1995 to 10,000 b/d currently. However, Bladon justified modifications to the FPSO's water handling capacity, which should in turn allow further oil from the Blenheim reservoir to be recovered. The Petrojarl I should now remain on station till the end of the century.

Fina has moved closer to developing Wendy, a discovery from 1977 in UK block 21/15a-5, following a successful appraisal well that tested 7,650 b/d of oil. A leased FPSO or a subsea tieback to a nearby platform, such as Shell's Tern, seem to be the main options.

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