Nick Terdre
Contributing Editor
DONG E&P Norge has launched its first operated development projects in the Norwegian sector, both involving subsea tiebacks to a host installation. The plan for development and operation (PDO) for the Oselvar field was approved in June, while sanction for Trym was still pending in July.
Since acquiring its first Norwegian licenses in 2000, DONG has been steadily building its portfolio, through participation in regular licensing rounds and asset trading and acquisition.
Trym, a gas/condensate field, is due on stream in late 2010 and will produce some 1.8 MMcm/d of gas and 5,700 b/d of condensate at peak. It is expected to remain in production for 16-17 years. Start-up on Oselvar, an oil and gas field, is scheduled for late 2011. Peak production will be 13,000 b/d of oil and 1 MMcm/d of gas. The estimated field life is 20 years.
Both will support the company’s ambition of lifting its overall production to 150,000-200,000 boe/d in the period 2015/2020, according to Anders Mørland, managing director of DONG E&P Norge. In 2008, output was around 50,000 boe/d, of which 69% came from Norway, largely due to a 10% stake in the giant Ormen Lange gas field. The company also has production from the Ula, Tambar, Gyda, Alve, and Glitne fields.
DONG’s involvement in Trym, discovered in 1990, goes back several years to the time when Shell was the operator and planned to develop it as a subsea tieback to Maersk’s Harald facilities in the Danish sector. However in 2006, the Norwegian authorities rejected the PDO on the grounds that a disproportionate part of the value would go to the infrastructure owners rather than the field licensees – the first time this would have happened in Norway.
Shell subsequently sold out, and after various changes among the licensees, DONG ended up as operator with a 50% interest, partnered by Germany’s Bayerngas.
It still plans a subsea tieback to Harald but has negotiated a different deal structure with Maersk and its partners. This involved a bit of give and take but the result is a more balanced agreement, Mørland says.
Trym, which has reserves of 3.4 bcm of gas and 4.7 MMbbl of condensate, is now set to make history in a second way – as the first wholly Norwegian field to be developed through facilities in the Danish sector. The permission of both the Norwegian and Danish governments is required, which is why the PDO, submitted last October, has taken so long to approve.
But Mørland sees it as a good sign that earlier this year the Ministry of Petroleum and Energy gave DONG permission to place orders for long-lead items which needed to be procured if the start-up schedule was to be attained.
Oselvar, also in the southern North Sea, will be tied back to BP’s Ula field. It was discovered by Elf exploration well 1/3-6 in 1991 and appraised in 1995. In 2007-08 DONG drilled a further appraisal well and two sidetracks, 1/3-10 and 10A, to firm up its reserves estimate. This now stands at 28 MMbbl of oil and 4.8 bcm of gas.
One of Dong’s two operated developments in Norway: Trym, a tieback to Harald in the Danish sector.
The similarity of development concept for the two fields has allowed some synergies to be achieved, Mørland says. In both cases contracts have been placed with Aker Solutions for the supply of the subsea production system. For each field the scope includes a four-slot template/manifold, subsea trees and wellheads, controls and a steel-tube umbilical. Oselvar will probably have three wells and Trym two. The Trym order includes a high-pressure riser.
DONG may also opt to contract development drilling for the two fields jointly, Mørland says. Bids were recently under review. Pipelay for Trym – a 6-km (3.7-mi), 8-in. (20.3-cm) pipeline – has been awarded to Acergy Offshore. Oselvar requires a 27-km (16.8-mi), 10-in. (25.4-cm) line. Some modifications will be needed on Ula and Harald, to be performed by the respective platform operators.
DONG came to Norway looking for hydrocarbons in general, though as time went by the company became more gas focused, Mørland says. This was one of the main drivers behind its acquisition of BP’s stake in the Ormen Lange field. "But we won’t shy away from oil prospects," he says. "We’d like a balanced portfolio, perhaps with the emphasis on gas."
At present, DONG has no further operated finds to bring to development in Norway, though it is involved as a partner in Eni’s Marulk gas/condensate field in the Norwegian Sea. The company would like to see progress towards a development soon, but may have to wait until capacity is available on the Norne FPSO, the likely host for a tie-back.
It has a spread of licenses on which exploration opportunities are being pursued, in the southern North Sea, in the Norwegian Sea, and in the Barents Sea. Its expansion in the Barents came in the latest licensing rounds. Under the Awards in Predefined Areas 2008 round it gained operatorship of PL 518, including several blocks close to Eni’s Goliat field. A seismic survey was recently run on this acreage. Also among the 20th round awards in May was a partnership in PL 529 in the western Barents Sea.
