Jeremy Beckman • London
Norske Shell has proven a potential new giant gas field in the northern Norwegian Sea. After weeks of speculation, the Norwegian Petroleum Directorate (NPD) confirmed that the Gro structure could hold 10-100 bcm (353 bcf-3.5 tcf) of recoverable gas.
This was the first exploration well in production license 326, awarded in 2004 under the 18th Norwegian licensing round. Well 6603/12-1, drilled by theLeiv Eriksson, encountered a 16-m (52.5-ft) gas column in Upper Cretaceous reservoir rocks. The water depth of 1,376 m (4,514-ft) was the deepest for any discovery to date on the Norwegian shelf.
This news confirms NPD’s view that E&P activity on the shelf is in good shape, despite the general global downward trend. According to its latest review, 15 wells were drilled in the first quarter of this year against 10 in the same period last year. The upsurge was stronger in development drilling, with 45 new wells, including laterals, compared with 27 in 1Q 2008.
The NPD logged six discoveries across the shelf in the period, all relatively small. The high success rate has continued in the second quarter, with Talisman Energy finding oil at the Grevling prospect in the North Sea, close to the Varg field. StatoilHydro added four new fields to its inventory, the most promising being Fulla, 40 km (24.9 mi) south of Heimdal, which could hold over 100 MMboe of gas-condensate.
Oil/liquids and gas production were also up on the corresponding figures for 2008, averaging respectively 2.51 MMb/d and 29.8bcf/d. New development plans were submitted for the Goliat oil field in the Barents Sea and the Oselvar oil and gas field in the North Sea. DONG has contracted Aker Solutions for the subsea production system for Oselvar, involving three wells tied back to BP’s Ula platform.
Emission restrictions threaten UK operations
Oil & Gas UK is monitoring planned changes to the European Union’s Emissions Trading Scheme (ETS). Phase III, due to run from 2013-2020, could pile further operating costs on the beleaguered UK offshore industry.
Power generation, combustion, and gas flaring inevitably generate greenhouse gases offshore. “Cleaner” alternatives often are unsuitable or too expensive for retrofitting to North Sea installations.
Nevertheless, under Phase II of the ETS, operators of qualifying installations could be obliged to pay for 20% of their annual emissions through purchase of EU allowances from 2013, rising to 70% in 2020. And from 2013, any production of electricity, as happens extensively offshore, will incur 100% purchase of allowances.
Industry is concerned that these extra costs could reduce recovery of reserves from the UK shelf, through truncating current production and by deterring investment in future projects. Oil & Gas UK estimates that as a result, up to 1 Bboe could be neglected.
The impact could be softened if the EU deemed the offshore sector as subject to carbon leakage – i.e. unfairly affected by competition from countries outside the EU not applying similar measures to limit emissions. But purchase allowances will not be lifted for production of electricity. As David Odling, Oil & Gas UK’s gas and commercial issues manager, points out, this provision will perversely affect the most modern and efficient offshore installations, which tend to be all-electric.
The association is trying to raise awareness of the impact of these proposals among UK government officials, fearing an exodus of investors from the North Sea. Oil and gas has been included on a provisional list of industries qualifying for carbon leakage relief, although a final decision will not be taken before year-end.
Serica proves oil in Slyne basin
Serica Energy has discovered oil with its first exploration well offshore Ireland, on the Bandon prospect. The semisubmersibleOcean Guardian drilled the well in Slyne basin frontier license 1/96, encountering oil in unspecified volumes in Jurassic and Sherwood intervals.
The same Sherwood sandstones are the source of Shell’s Corrib gas field to the north, so this outcome may have been unexpected. According to Serica, it was also the first oil find anywhere off western Ireland for nearly 30 years.
Based on new geological and petrophysical data, Serica plans to evaluate further drilling targets in the acreage. Recently, it applied for another permit in the region under Ireland’s Rockall basin licensing round.
In the shallow water Celtic Sea off southern Ireland, Island Oil & Gas has commissioned a scoping study concerning two development options for its Old Head of Kinsale gas field. One involves a tieback to the Kinsale platform complex, newly acquired by Star Energy/Petronas; the other would be a subsea-shore scheme. In either case, Island would be interested in converting the field to a gas storage facility with capacity for up to 15 bcf, based on Old Head’s estimated reserves of 49 bcf and reservoir pressure of 1,781 psia.
Chevron, Total weigh WoS options
Chevron is moving toward a decision on its Rosebank/Lochnagar oil and gas project west of Shetland. It has contracted Intecsea in Houston to evaluate various development options for the field, in 3,700 ft (1,128 m) water depth. The scope of work includes subsea equipment, risers, topsides/process, FPSO and semisubmersible hulls, and gas export needs. WorleyParson’s Upstream division is providing support on topsides studies.
Another soon-to-be-developed resource in the area is gas from Total’s Laggan and Tormore fields. Operator Total has commissioned Doris Engineering and Offshore Design Engineering in London for development studies based on a direct subsea tieback to a new processing plant on the main Shetland island.
The two fields will deliver gas via two subsea production systems around 16 km (10 mi) apart, in 600 m (1,968 ft) of water. Total plans up to eight subsea wells connected by two 125-km (77.7-mi), 18-in. (45.7-cm) production flowlines to the treatment terminal, along with a 125 km methanol injection line and control umbilical. Following compression, the treated gas will head 234 km (145 mi) through another new pipeline to a tie-in point close to the Frigg trunkline system for onward passage to St Fergus in eastern Scotland. First gas is targeted for 2013/14.
