Frontier drillers confirm gas plays
Mid-Norway's reputation as a gas-prone province has been reinforced by two drilling successes. ExxonMobil's Bella Donna discovery came in a lightly explored area of the Halten Terrace - the nearest indicator had been a well 15 km to the southeast, which was plugged and abandoned in 1984 following minor gas shows in Jurassic sandstones. Bella Donna, drilled to a total depth of 5,500 meters by the semisubmersible West Alpha, is a high-pressure, high-temperature structure currently believed to be under test. The nearest gas production centers are Heidrun and
Norsk Hydro's 6305/8-1 was a commitment appraisal well on Ormen Lange in the deepwater Moere basin. The well, drilled by the semi Scarabeo V to a total depth of 3,175 meters, confirmed anticipated gas volumes in the central zone of this giant, elongated field, which is known to extend over four contiguous blocks. Unexpectedly, the well also intersected a three-meter-thick oil zone at the reservoir base, but this is thought to be unexploitable using current techniques.
Ormen Lange's potential gas yield now stands at 13 tcf, and could swell further following a well planned next year in the less understood northern zone. Development-phase operator Hydro may push to issue a PDO (production development order) by 2003, based on a wholly subsea development exporting to the shore through a multiphase pipeline.
Statoil's first wildcat in the Nordland VI region of the Norwegian Sea yielded important geological data, but no hydrocarbons. The targeted Paleocene horizons, southwest of the Lofoten Islands, had been hitherto unexplored. The drillship West Navion has since moved on to spud a well on Statoil's Falk prospect, close to the recent Svale oil discovery.
The surge in remote subsea wells, which these and other projects will generate, has led to a new well intervention cost-cutting initiative. Eighteen oil companies, led by Statoil, are focusing on eight Norwegian fields with a combined 200 subsea wells, which could require 50 interventions each year. Measures under review include collective long-term charters of rigs and lightweight intervention vessels, aimed at generating annual savings of up to NKr 1 billion.
DONG takes Freja stake
The Alba Field Partners led by Chevron, are to develop reserves in the extreme south of the field via subsea facilities.
Cross-border relations between Denmark and Norway seem to be strengthening. Danish state oil and gas concern DONG has agreed to take on Statoil's 20% stake in Norwegian license PL 113, which includes the problematic median line oil and gas discovery Freja, operated by Amerada Hess. Statoil, meanwhile, is considering adding a small unmanned monotower wellhead platform to tap a small oil structure in the Danish sector.
Siri East is a 6-7 million bbl pool around 9 km from Statoil's Siri Central platform, which began producing in March last year. Production has since declined to 40,000 b/d, with remaining field life estimated at seven years. The planned mini-platform is of the type routinely adopted by DUC in Danish sector fields, but this would be a first-time experience for Statoil. It would be linked to Siri Central via oil, gas, and water injector flowlines, at an overall cost of NKr 400-500 million.
The ongoing development of Mærsk's Halfdan Field could stem a predicted decline in Danish oil output between 2002 and 2004, according to a new forecast from the Danish Energy Agency. Halfdan is being developed through nine platform wells outputting 25,000 b/d, but there is potential for up to 32 development wells following additional process capacity. Other small-scale developments lined up in the sector include Bertel, Boje, Lola, Sif, and Tyra South-East.
Mikkel cleared for gas exports
Statoil's Mikkel Field has been authorized to supply gas for Norwegian sales contracts. The decision by the Ministry of Petroleum and Energy, following long deliberation, has revived development plans which had been suspended since last spring. Statoil has two options in mind:
- A subsea system transferring wellstream to the Åsgard B production semi via Midgard, with a potential project cost of NKr 2 billion
- A tie-in to Norske Shell's Draugen platform, recovering more gas (19-24 bcm), but at a potential cost of up to NKr 4 billion.
Norwegian gas producers gained a further boost when the Ministry approved Norsk Hydro's plan for the new Vesterled pipeline. This entails installation of a 50 km, 32-in. line with 11 bcm capacity between the Heimdal platform in the southern Norwegian sector to a tie-in point on the Frigg trunkline. EMC will lay the line next summer, in water depths of 110-125 meters. Hydro also plans to add a riser platform at Heimdal to receive gas from nearby fields, which will then feed into Vesterled.
UKCS tax fears allayed
UK Chancellor Gordon Brown has suppressed his rumored urge for a windfall petroleum tax in the UK sector. A rise had been feared in last month's budget, as the government sought to deflect anger over its repeated fuel tax hikes onto the high oil price club.
Industry profits are being dented by rocketing rig rates. Those hit hardest are the independents. At the recent North Sea Beyond 2000 conference in London, Veba's Martin Wilson pointed out that his company was a new operator on the UKCS targeting small accumulations up to 25 km from platforms. These small discoveries are risky and effort-intensive, he said. A key difficulty, he added, is that development drilling accounts for 40% of a typical marginal field development cost. "But if the rig rate continues to soar, I can't do that development." Wilson urged greater communication between drilling contractors and operators to solve the impasse.
French gas utility branches out
Gaz de France has broadened its European upstream power base through two assets deals offshore Norway and the Netherlands. In August, it acquired TransCanada's entire Dutch sector portfolio for DFl 816 million. This included operatorship of five producing gasfields in the K and L North Sea quadrants, plus shares in two discoveries with combined reserves of 255 bcf (according to analysts Wood Mackenzie). Gaz de France also gained 38.57% in the NGT trunkline, linking its own fields and those of third parties in the central Dutch sector to Uithuizen on the mainland.
In October, it took advantage of Statoil's asset disposal policy to buy 12% of the Sn hvit Field in the Barents Sea, expected to go forward soon as a $2 billion gas/condensate development exporting to an LNG plant to be built near Hammerfest.
Also in the Dutch sector, Clyde has announced a successful appraisal of its Bunter sandstone P/9-9 gas discovery. The deepened well, drilled by jackup Noble Lynda Bossler, flowed at an unstimulated test rate of 11 MMcf/d from a 10-meter, perforated interval. The location is south of Clyde's P6 production complex.
