Jeremy Beckman • London
Majors launch WoS studies
An upsurge in activity west of the Shetlands could trigger some major projects over the next few years.
BP has set the wheels in motion for a second-phase development of Clair, the region’s largest oil and gas field. It has contracted UK group Amec for conceptual engineering that will include FEED studies for various fixed platform solutions. The program will focus on the Clair Ridge area, which BP has appraised over the past three years since the field came on stream.
Southwest of Clair in block 205/26a, UK independent Chrysaor will shortly submit a development plan for Solan, discovered by Hess in the 1990s. Last summer, well management group Senergy drilled a successful appraisal well in a northerly location which encountered 85 ft (26 m) of net oil-bearing Jurassic reservoir. Chrysaor is aiming for first production in 2010 from two wells, using a steel articulated tower platform – a first for the UKCS – with subsea storage.
Close to the median line with the Faroe Islands, Chevron recently spudded the fourth appraisal well on its Rosebank/Lochnagar oil and gas field, in 3,800 ft (1,158 m) of water. This is the first of three wells in the Greater Rosebank area. It also marks the debut for the drillshipStena Carron, equipped for year-round harsh weather drilling, which was recently delivered from Samsung’s yard in Geoje, South Korea.
Stena Carron preparing to drill the fourth Rosebank appraisal well for Chevron.
Chevron is a member of the West of Shetland Task Force, an industry/government association looking at ways to harness stranded gas reserves in the region that include Total’s Laggan and Tormore fields north of Clair. Independent broker Harrison Lovegrove has been hired to sound out a range of potential investors, including power utilities, about an integrated gas export scheme. Total gained further blocks next to its fields under the UK’s 25th licensing round last fall, and is known to be considering a subsea tieback to the Sullom Voe terminal on the main Shetland island.
Faroes awards further licenses
StatoilHydro, a co-venturer in Rosebank, recently secured its fifth operatorship in Faroese waters under the islands’ third licensing round. The company and its partners Dong, Faroe Petroleum, and Atlantic Petroleum picked up license 016, covering 33 blocks and extending over 5,312 sq km (2,051 sq mi) – the largest award so far offshore the Faroes.
The other two new licenses went to Faroese-registered companies Geyser Petroleum and Foroya Kolvetni. Total acreage awarded amounted to 6,505 sq km (2,512 sq mi). In each gas license the terms are between three and six years. Work obligations include acquisition and processing of seismic data, but with no commitment to drill.
Drilling shifts to frontier regions
In Norway’s sector of the Barents Sea, StatoilHydro has completed exploration drilling on its Nucula oil and gas discovery in production license PL 393. The delineation exercise proved a small oil column in Triassic sandstones, but the size of the find appears to be at the low end of the original estimate (6-12 MMcm of oil). Nucula is 110 km (68.4 mi) northeast of Eni’s much larger Goliat, the imminent second field development in this sector.
Farther south, the Norwegian Petroleum Directorate has approved three high profile wells in frontier regions. Two are in the deepwater Voering basin: Norske Shell’s well is being drilled by the semisubLeiv Eriksson on the Gro prospect in 1,400 m (4,593 ft) of water, 400 km (249 mi) northwest of Kristiansund. The nearest discoveries are Stetind and Gjallar, respectively 75 km (47 mi) and 115 km (71 mi) distant. StatoilHydro should already be under way with its well on PL 328, 30 km (19 mi) southeast of Gjallar.
Total should also have started its well on Victoria in 420 m (1,378 ft) of water in Norwegian Sea license PL 211/211-B. Victoria – formerly Belladonna – is a high pressure/high temperature gas field that proved too problematic for previous operator ExxonMobil. Total, however, has strong experience with HP/HT fields in the UK central North Sea, and is thought to be keen to use this campaign to raise its profile in Norwegian waters.
BP, BG fortify strongholds
Asset trading is picking up across the North Sea, but for varying reasons. The largest transaction, valued at £304 million ($452 million) and encompassing 17,000 boe/d of production on the UK shelf, was between BG Group and BP. Consolidation was the main motivation.
BP agreed to take BG’s operated interests in four producing fields in the southern gas basin, close to the eastern English coast, and non-operated stakes in BP’s Amethyst, Whittle, and Wollaston fields to the south. In return, BG assumes BP’s operating position in the Everest and Lomond gas fields in the central North Sea, and stakes in Chevron’s Erskine and BG’s Armada fields in the same sector. Both deals are subject to government and partner approvals.
Sweden’s PA Resources is offloading all its Norwegian E&P interests to Bayerngas Norge for $220 million. PA will re-direct these funds into projects in other sectors of the North Sea and Africa. The German gas distributor aims to become a force in North Sea upstream production, following the paths trodden by EON Ruhrgas and GDF Suez.
Others are suffering withdrawal symptoms caused by the plunging oil price. DNO, for instance, is reviewing its shareholding in Det Norske oljeselskap, the second largest Norwegian oil company in terms of operated licenses. This follows a drop in Det Norske’s market value of nearly two-thirds to around NOK1.7 billion ($240 million). DNO is chiefly concerned at the cost of Det Norske’s proposal to redevelop the Froy oil field in the North Sea with a production jackup.
Another independent, Canada’s Bow Valley Energy, is looking to shift its stake in Peik, Lundin Petroleum’s Norway-UK gas condensate project, which has been on the drawing board for some time.
