Norske Shell gains choice block

A new wave of deepwater exploration is in prospect off mid-Norway, following the recent 16th Round licensing awards.

Th 6006osnse1

A new wave of deepwater exploration is in prospect off mid-Norway, following the recent 16th Round licensing awards. Thirty-four blocks or part-blocks were issued in the already producing Haltenbanken region, and in some of the deeper provinces farther north. BP Amoco led the line with four operatorships. TotalFinaElf gained its first Norwegian deepwater license, in the Voering Basin, while Chevron was similarly honored with blocks lying northwest of Heidrun.

The big prize, Block 6406/5, went to Norske Shell. This contains a potentially major gas-condensate structure imaged by seismic acquired by Statoil - the acreage borders Statoil's 6406/2 block to the north, which holds the four high temperature, high pressure discoveries: Erlend, Kristin, Lavrans, and Ragnfrid. The latter also extends into Block 6406/5. While Statoil may feel thwarted over the award, it has at least earned 20% participation in this license.

Norsk Hydro secured three operatorships, including 6305/9 and part of 6305/8, which lie east of the giant undeveloped gas discovery Ormen Lange (the remainder of 6305/8, adjoining the reservoir, was given to Shell last September in an out of round award). Hydro plans to resume appraisal drilling on Ormen Lange next month, in the "saddle" area between the main and southern sections of the field, using the semisubmersible Scarabeo 5. A second well next year will attempt to delineate the northern part of this field, which lies in Hydro-operated PL209.

Ormen Lange's reserves are currently estimated at 390 bcm, in water depths of 850 meters. Hydro is assessing four concepts for the development - either subsea facilities direct to a shore point 100 km away, a large standalone production platform, subsea wells tied back to a platform in shallower waters, or a deepwater platform exporting the gas through pipelines.

The subsea solution chosen will depend on the field's areal extent. Seventeen development wells are envisaged, with 2006 the hypothetical start-up date (following a PDO submission in 2002). The gas could be directed at the UK, rather than the usual markets for Norwegian gas in mainland Europe.

Further south in the Tampen area of the North Sea, Hydro has achieved an oil discovery with well 34/4-10, drilled by the semisub Transocean Arctic. The well was drilled in 357 meters water depth, 20 km north of the Snorre tension leg platform (TLP). Hydrocarbon-bearing structures were proven in the secondary target area. However, commerciality is unclear at this stage.

Norway production scaled down

Restrictions on Norwegian oil production have been eased to 100,000 b/d, following OPEC members' recent decision to collectively up theirs. Norway's government had instituted a cutback of 200,000 b/d since mid-1998, in response to global oversupply concerns at that point. However, with some Norwegian fields under-performing of late, that slowdown has effectively not been enforced. This year, for instance, Norwegian production was forecast to average 3.4 million b/d, but the actual performance to date has been only 3.1 million b/d.

These output levels - still among the world's highest - could be sustained for many years, according to the latest estimates of Norway's reserves bank by the Norwegian Petroleum Directorate. The total stands currently at 13.2 bcm of oil equivalent, of which only 21% has so far been produced. There are at least 30 more Norwegian oil and gas discoveries awaiting development over the next 10 years, which would cumulatively push Norway's gas exports to 80-85 bcm/year by 2010.

Modest increase in active rigs

Th 6006osnse1
Location of the Amerada Hess-operated oil and gas discovery in Outer Moray Firth block 15/2.
Click here to enlarge image

Arthur Andersen's latest review of drilling activity in Europe suggests that the North Sea is slowly emerging from a recession. The steady nose dive since 1997 was halted in this year's first quarter, with 13 new exploration and appraisal well starts on the UKCS, compared with nine in 1999's first quarter. Kerr-McGee was the chief contributor as it appraised its Leadon oilfield discovery. In Norway, five wells were drilled in 1Q-2000 compared with one for the corresponding period last year. Levels in The Netherlands and Denmark were virtually unchanged.

Last week, Amerada Hess announced a new oil and gas discovery in the prolific Outer Moray Firth Basin. The well, drilled by the Stena Spey rig in Block 15/2, found potentially commercial quantities in Early Cretaceous Kopervik sands. The field is also within striking distance of Amerada's floating production semisubmersible, AHOO1, currently host to Phillips' Rubie and Renee fields.

In the southern gas basin, BP Amoco has been drilling its first new infill wells on the mature Inde Field, using the jackup Glomar Adriatic VI. The first well, D-6, was drilled as a side-track to 17,120 ft from the poorly producing D-1 well, and tested 35 MMcf/d on a restricted choke. It was due to be brought onstream swiftly last month. The other well is being drilled from the Inde B platform.

BP Amoco is also exploring its Vrackie prospect west of Shetland. Others currently active in this area with deepwater wells include Marathon and Enterprise, the latter shrugging off a brief hijack of the Jack Bates semisubmersible on its way out of port in northern Scotland.

UK gas projects cleared to resume

Britain's government has lifted its restriction on new gas-fired power stations, enacted partly to halt the slide in the national coal industry. Instead, the suffering was passed on to offshore fabrication yards as orders for minimal gas platforms tailed off. The UK Offshore Operators Association (UKOOA) welcomed the shift, pointing out that gas-fired power had been a major contributor to the UK meeting its Kyoto emission targets.

Two prospective gasfield developments are Rhum and Devenick in the Central North Sea, respectively 90 km and 20 km north of the Harding platform. Operator BP Amoco is preparing to issue front end engineering study contracts, which could generate wellhead platforms for both fields and a possible extension of the Miller gas export line to the south.

Elsewhere, Mobil has submitted plans for a subsea tieback of Skene in northern Block 9/19 to the Beryl platform, 15 km to the northwest - Skene was a contender for a platform at one stage. Talisman plans to develop the small Halley oil discovery in Block 30/12 via two extended reach wells from Shell's Fulmar platform. And Petrobras is closing in on a solution for the Blane oilfield - a leased floating facility is thought to be favored. Blane straddles UK Block 30/3a and Norwegian Block 1 /2.

Action cannot come soon enough for UK fabricators. The dearth of projects has forced Amec to put its yard on Tyneside on a care and maintenance basis, while Barmac's yard in northern Scotland is also idle. Kvaerner mothballed its property on Teesside in November, and reportedly placed in on the sales block.

More in Home