Offshore Europe

Jeremy Beckman • London

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Talisman, Chevron grow North Sea empires

Talisman Energy looks set for further growth in the North Sea following the company’s expected acquisition of Paladin Resources. Paladin’s board had recommended acceptance of the offer, which was tabled late in October.

The London-based independent was established in the late 1990s and in recent years has built up a spread of operated interests offshore Europe, Africa, Indonesia, and northern Australia. The most interesting to Talisman were the Monarb production complex in the central UK North Sea and various small field developments in the Norwegian sector. Talisman is known for its work on revitalizing neglected production hubs, but in Monarb’s case, Paladin had done the hard work. Here the Montrose platform, formerly operated by BP/Amoco, is being equipped with a compression module to handle gas both from existing fields in the area and from new subsea field developments such as Wood, due onstream late next year.

In its last financial statement, Paladin said it has boosted production at Monarb to 30,000 b/d, more than 50% higher than when it assumed operatorship two years ago, in part through infill drilling. It has also identified a large number of new Jurassic structural-stratigraphic prospects, two of which were under consideration for wells. And it has plans to tie in North Montrose and a newly acquired gas-condensate discovery, Fiddich, situated 20 km southwest of Monarb. Talisman has affirmed it intends to pursue some of these prospects, armed with a bigger exploration budget.

Offshore Norway, the package comprises 600,000 acres of exploration acreage and 40% operatorship of Production License 316 in the Egersund Basin, where Talisman itself was already building an exploration position. Paladin’s operated developments are the trans-North Sea border subsea tiebacks Blane and Enoch, which are heading respectively to the Ula and Brae platforms, with combined production of 26,000 b/d.

It was also planning to drill the Hummer prospect, which lies 10 km north of Blane, after a well on the Aimee prospect in PL 316. A short distance to the west, Paladin operates acreage containing Yme, a “stranded” oilfield abandoned prematurely by Statoil, when oil prices were on the way down. If the Aimee well delivered, a tieback to a new development on Yme was in the cards.

Chevron’s recent takeover of Unocal was in a different league, price-wise, and its main targets were Unocal’s interest in Southeast Asia. But Chevron also plans to grow Unocal’s Netherlands operations, according to its latest North Sea house newsletter,Insight. Unocal was the first company to bring oil to shore in the sector via a pipeline, and today it operates seven platforms producing collectively 11 MMcf/d of gas and 4,500 b/d of oil.

In recent years, Unocal has sought to sustain production rates through various schemes such as replacing a workover rig with a lower cost jacking unit/work basket for workovers; improving the performance of electric submersible downhole pumps; drilling horizontal wells as part of the Helder oilfield redevelopment; and developing the tight Halfweg gas and fractured Horizon oil fields. Chevron plans to generate further revenue by seeking new third-party users for Unocal’s gas processing and export infrastructure.

Bids mount for Norway blocks

Norway’s exploration revival is gathering pace, with a record 29 companies submitting license bids under the country’s 2005 Awards in Predefined Areas (APA) program. The winners should be announced in December.

APA, a recent innovation, was introduced by the government to aid the industry’s exploration planning. It does this by advertising what will be made available in the years to come. Previously earmarked acreage was concentrated in mature North Sea areas, whereas this year’s offerings include 51 blocks in the Norwegian Sea and 24 in the Barents Sea. APA 2005 extends across 68,937 sq km in total, making this Norway’s second largest licensing round to date in size of area offered.

Heavyweights such as Statoil have urged access to more politically sensitive waters farther north, such as the fishing grounds close to the Lofoten Islands. With Norway’s new socialist-led administration, this type of lobbying may fall on deaf ears. However, Statoil remains committed to maintaining exploration drilling levels on the shelf (as operator and participant) at around 20 wells annually in the years ahead. The delayed arrival of two semis will likely cause it to miss that target in 2005, but the company expects fewer problems in future, having secured rig capacity for the next three years under a pooling arrangement with Eni, Hydro, and Shell.

In the North Sea, Statoil has submitted a revised plan to the government for improving oil recovery at Tordis. If approved, this would include the world’s first full-scale subsea separation. Kongsberg FMC has received a letter of intent earlier this year to build the equipment, which would be capable of separating and injecting water. Statoil plans to extract a further 35 MMbbl from Tordis, which currently produces through subsea wells tied back to the Gullfaks C platform. The estimated cost is $277 million.

Statoil also is chasing recovery enhancement across the board in its North Sea strongholds. R&D programs include producing injection water from the sub-surface to improve pressure support on Visund; increased application of water alternating gas injection on Snorre, and injecting phosphates and nitrogen into the Gullfaks reservoir from the Gullfaks A platform. Here, the aim is to sustain beneficial microbes that extract nutrients from the crude. Their enzymes serve effectively as detergents, making the water more soluble and therefore more easily “washed out” of the reservoir.•

Baltic pipeline taking shape

Germany’s Wingas has reached agreement with Russia’s Gazexport concerning gas deliveries through the proposed Northern European Gas (NEG) pipeline. The basic terms for the on/offshore project were first announced by both parties and another German company, Ruhrgas, in early September, with construction work to be managed by a new German/Russian joint venture. Excavations at the Russian end were due to start this fall.