Jeremy Beckman • London
Luno revitalizes Norway
Norwegian North Sea exploration is reviving after years of low-risk, near-platform step-outs, with independents leading the way.
Map shows location of Lundin’s Luno oil discovery.
Sweden’s Lundin Petroleum has made what could be the area’s largest oil discovery in the past decade with its first operated well on the Norwegian shelf. The semisubmersibleBredford Dolphin found light oil in Jurassic sandstones while drilling the Luno prospect in production license PL 338, 28-km (17.4 mi) east of StatoilHydro’s Gudrun field. Although the well was not production tested, partner Revus Energy says recoverable reserves could be up to 180 MMbbl.
Revus was also party to another recent discovery in the North Sea, drilled by the jackupMaersk Giant on the Storskrymten prospect in 90 m (295 ft) of water. Well 15/12-18S and a subsequent sidetrack, operated by Det norske oljeselskap, encountered oil in Paleocene Ty formation sandstones and in the overlying Heimdal formation. Recoverable reserves are estimated at 9-44 MMbbl, which could be produced through the Petrojarl Varg FPSO, 17 km (10.5 mi) to the south.
Developers drawn to heavy oil
High crude prices are luring investors to an untouched heavy oil corridor in the UK northern North Sea. Two long-dormant fields in Quadrant 9 could undergo phased developments, depending on the outcome of appraisal drilling.
Xcite Energy, which picked up the Bentley field in block 9/3b under a Promote license, is aiming for early production in spring 2009. Amoco drilled the discovery well in 1977, but interest waned following two Conoco-operated appraisal wells in the 1980s. Based on a recent review of 2D seismic, consultants RPS Energy Canada assess in-place oil throughout the block at 592MMbbl.
Xcite should have a better idea once it completes a third appraiser, due to spud by year-end. Script-permitting, its next step will be to gauge flow via a six-month extended well test, starting late 2008. The company’s longer-term goal is to generate 60,000b/d net from the block by 2012.
Immediately to the west in block 9/2b, Nautical Petroleum recently concluded a well on the Kraken field, at a location 2.7 km (1.7 mi) north of Occidental’s 1985 discovery. The result exceeded expectations, oil being encountered 71 ft (21.6 m) below the predicted oil/water contact.
Pressure measurements suggest the reservoir sands are in communication with the Heimdal oil reservoir intersected by the first well. To Nautical’s surprise, the 18º crude was also substantially lighter than both the 1985 sample and the larger Bressay field to the north, operated by StatoilHydro. Nautical plans further appraisal drilling to assess flow rates, and is thought to be looking at early production via a floater.
Big returns for UK explorers
Another newcomer chasing big oil in the UK far north is US independent Fox Petroleum. The company aims to farm into the southern half of block 211/17, currently operated by Petrofac, by financing an exploratory well next year on the Bourbon structure. This is a 167-MMbbl prospect in Brent sandstone, comprising tilted fault blocks known to be favorable for trapping hydrocarbons.
Fox claims this is one of the least risky exploration plays in the North Sea, with further prospectivity lower down in Statfjord and Cormorant sandstones. In adjacent blocks, the company adds, processing capacity could be available in the event of a discovery in either the Magnus or Eider facilities. Eider’s platform, currently producing only 1,000 b/d, is one of several far north assets recently put up for sale by operator Shell.
UK groups eye subsea storage
Petronas International, a shareholder in London-based Star Energy, has made an offer to buy the company outright. Star, an onshore UK E&P specialist, also has plans to convert the abandoned Esmond and Gordon fields in the southern North Sea for gas storage.
Recently, Amec conducted a conceptual design study, which found that both fields have the right geological characteristics to accommodate a 145-Bcf capacity storage facility, subject to the outcome of an appraisal well on Esmond. Star plans to drill this well during spring 2008, in partnership with Petronas and UK company EnCore Oil.
The study also confirmed a probable capital outlay of $2.38 billion for the re-development of the two fields, comprising two offshore platforms with compression, a 200-km (124-mi) 42-in. (106.7 cm) pipeline, and a new reception/processing terminal at Bacton on the English east coast.
Assuming government sanction, this would be the UK’s largest gas storage facility, EnCore says, although another planned project in the Irish Sea may eclipse it. Here Gateway Storage Co., managed by Edinburgh-based Stag Energy, plans to construct a $1.033-billion, 1.1 bcm storage complex in salt caverns more than 750 m (2,460-ft) below the seabed.
The planned location would be 15 mi (24.14 km) offshore northwest England, southwest of Barrow-in-Furness. It would be connected to the UK’s national gas grid via a new subsea pipeline to a gas compression station next to the Morecambe field gas terminals in Barrow.
