Prompt start for Faroese drilling
Blocks and part-blocks awarded under the 1st Faroese Licensing Round.
Compromise was the key outcome of the first Faroese offshore licensing round. Nearly 14,000 sq km was put on offer when the round was launched this Feb-ruary, but most applications focused on the four blocks not covered by basalt. Seven groups emerged with blocks or part-blocks, none of which quite matched expectations. Those rejected included Conoco, Mar-athon, Norsk Hydro, and Texaco.
Most coveted were blocks 6004/16 and 17, 20 km from BP's Foinaven and Schiehallion fields on the UK side of the median line. These were split between groups led by Agip, Amerada Hess, and Statoil. BP did gain outright control of acreage just to the north, plus part-block 6005-15 to the west. BP will begin its drilling campaign next summer.
Other groups should follow suit, although the position is less clear in the three licenses where the presence of basalt hampers seismic activity. Faroese Energy Minister Eyoun Elttor admitted that some applicants had only accepted awards on the provision that more attractive acreage would later become available. Certain oil companies had also expressed doubts about the regulatory regime for drilling, but the Ministry claims that all due safety and environmental measures will be in place by next spring.
Norwegian activity far from spent
Norwegian sector operators could spend more than NKr 1,000 billion over the coming decade on exploration, development, and operations, according to Statoil's latest forecast. This would virtually match the outlay of the past 10 years, with Statoil itself contributing nearly half the projected total.
Investments in new Norwegian projects will likely top NKr 350 billion over the forecast period, Statoil adds, with gross revenues to Norway from oil and gas sales of NKr 2-3,000 billion. Oil production should climb slightly, with gas output surging ahead, based purely on existing sales contracts. But there is potential for further gas offtake as the European distribution market expands.
Much of that gas will come from currently undeveloped fields in Mid-Norway's Halten Bank.
Here the customary disagreements among members of Norway's Gas Supply Committee (FU) are holding back development of Statoil's Mikkel Field. Statoil, Norsk Hydro and Exxon-Mobil are pushing for the field to be allocated a sales contract next spring, but other FU members have different priorities. Mikel, with reserves of around 19 bcm, would cost a minimum of NKr 1.7 billion to develop, probably via subsea wells linked to the Aasgard production semisubmersible.
Other fields under review for gas disposal include Esso's Ringhorne. Heerema Tonsberg has just been awarded the contract to build the 9,500 ton topsides. ABB Offshore Systems will handle overall platform engineering and detailed deck engineering. The platform will be based on the Jotun B wellhead platform delivered by the same partnership in 1998.
Danish, Dutch wells pay off
Lower profile operators in other sectors have been hitting the target. In Danish block 5605/10, DONG's Nini-1 well found oil in a Paleogene sandstone formation. The well, drilled by the Ensco 70 jackup in 58 meters water depth, was then sidetracked, with a similar outcome. Test flow rates are thought to have exceeded 5,500 b/d. The nearest production complex is Statoil's Siri, 30 km to the southwest.
In the Dutch sector, Clyde's P9-9 well flowed at an unstimulated test rate of 11 MMcf/d from a 10 meter perforated interval within Bunter horizons. P9-9 lies 10 km from Clyde-operated pipeline and processing facilities.
Finally, Irish independent Providence Res-ources' latest well on Helvick (discovered by Gulf in 1983 off southern Ireland) yielded flow rates of 5,200 b/d of oil. Reserves were originally pegged at 7 million bbl, but this latest outcome backs re-analysis which puts the figure nearer 30 million bbl. This could lead to development via a floater, with first production by mid-2002.
Oil rim confirmed in Ormen Lange
Norsk Hydro has made the first oil discovery in the deepwater Norwegian Sea, Its latest appraisal of the giant Ormen Lange gasfield also intersected a three meter thick oil zone. Hydro is evaluating the find, but says it will not impact the development plan for the gas. The well was drilled to a total depth of 3,175 meters by the semisubmersible Scarabeo 5, on the eastern edge of the southern section of the 50-km-long reservoir. The presence of gas in the Vale reservoir was also proven. This confirms the recoverable reserves estimate of 315 bcm, according to the Norwegian Petroleum Directorate.
Hydro had no such luck proving oil in another well west of the Troll Field. In the Barents Sea, its exploratory well 300 km north of Hammerfest has been abandoned with no result. Statoil was also disappointed with its appraisal sidetrack on Ragnfrid in the Halten Bank. Estimates for this gas condensate field will now be marked down, probably causing development to be put back.
Despite this setback, Statoil is planning exploration of the Falk prospect close to its recent 100 million bbl Svale discovery, in the same region. Statoil has in mind a development based on four producer wells, two injectors and a 10 km pipeline tied to the Norne production vessel. Statoil also plans to drill a large, high risk Tertiary oil prospect in the Vestfjord Basin, north of Norne.
Shell ushers in further projects
Shell claims that spending on its UK-operated North Sea developments could rise by 20% next year to $1.2 billion. It has identified six projects which could come forward, including:
- Goldeneye, a gas-condensate field in the South Halibut Basin in the Outer Moray Firth, with potential reserves of 200 bcf and 30 million bbl. The preferred development option is an unmanned platform with "full wellstream transfer" and a new pipeline to St Fergus near Aberdeen.
- Penguins are five oil and gas-condensate accumulations in East Shetland blocks 211/13a and 14. A subsea link to existing facilities is predicted; Brent lies 60 km to the south.
- Mandarin is an HP/HT oilfield in the Central sector.
- Goosander, a small oilfield in Central block 21/12, could be fast-tracked, again as a subsea project, to extend the life of the Kittiwake platform.
Over the next five years, Shell expects to double its current spending on exploration drilling and seismic activity to nearly $300 million. It is also among a group of operators offering undeveloped problematic discoveries to the market under the Satellite Accelerator Initiative. Solutions are being sought for Shell's Kestrel oilfield in the Central North Sea, BP's Wood and Kessog, and Amerada's Solan and Strathmore oilfields west of Shetland. Cumulative reserves for these fields are put at over 200 Mmboe. ;
