Jeremy Beckman • London
Oil and gas investments on the Norwegian shelf are set to climb to $26.6 billion by 2014, 10% above last year’s figure, according to the Norwegian Oil Industry Association (OLF). But this may not be enough to stem Norway’s production decline – over the next few years, OLF warns, the country’s oil output could sink to half the peak achieved in 2000, while gas production shows signs of leveling off.
Gro Braekken, managing director, said the industry had committed to a higher level of exploration, which had brought several new discoveries. But most have been small because the government had not opened sufficient exploration acreage since the mid-1990s.
OLF estimates Norway’s remaining recoverable reserves at 51 Bboe, with an uncertainty range of 33-73 Bboe owing to limited knowledge of potential in large parts of the Barents and Norwegian seas. One positive recent development was the redefinition of the country’s maritime boundary with Russia, which could spur fresh activity on the Norwegian side, Braekken said.
Last month, bids were closed for Norway’s 21st licensing round. According to the Norwegian Petroleum Directorate, frontier acreage drew a strong response, although the total of bidders for blocks was only 37, compared with 46 for the 20th round. The Ministry of Petroleum and Energy offered 94 blocks and part-blocks – the awards should be issued next spring.
Statoil goes for growth
Statoil, always the prime mover in Norway’s development sector, is pushing ahead with five new projects. The largest in value is Valemon in the North Sea, targeting 200 MMboe of reserves. Statoil has submitted to the authorities a $3.36-billion scheme based around a fixed steel platform providing separation of gas, condensate, and water. Heerema has a letter of intent to build the 9,200-metric ton (10,141-ton) jacket in Vlissingen, the Netherlands, and later to install it.
Valemon, between the producing Kvitebjorn and Gullfaks South fields, will export its gas via the Huldra-Heimdal pipeline, while its condensate will be piped to Kvitebjorn for stabilization and onward transport to the refinery at Mongstad.
Statoil aims to prolong the lifespan of the Njord platform through the Gygrid tieback.
At the Åsgard complex in the Norwegian Sea, Statoil and partners have decided against adding a new platform to counter future pressure decline at the Midgard and Mikkel fields, opting instead for subsea compression. Both fields are tied back long distances to the Åsgard B floating platform, but will need pressure support from end-2014 onwards.
The proposed subsea equipment comprises a gas cooler, a liquids separator, and a compressor, the latter probably powered directly from the Åsgard A production ship. The kit would be stationed in between the reservoirs and the host platform.
Also in the Norwegian Sea, Statoil is set to tie back the Gygrid oil discovery 20 km (12.4 mi) to the Njord A semisubmersible platform. If approved, this would extend the Njord facilities’ life-span beyond 2015. Finally, in the North Sea, Statoil has contracted Subsea 7 for subsea installations for Katla and Pan Pandora, two recent finds with total reserves of 100 MMboe. Katla will tieback to the Oseberg South platform, and Pan Pandora to Gullfaks C.
Jasmine boost for J-block
ConocoPhillips has also triggered a construction spree, winning UK government sanction for its Jasmine project in the central North Sea J block. Jasmine is a high-pressure/high-temperature gas condensate field discovered in September 2006. Its reserves of over 100 MMboe make this the UK’s largest current development, although other heavyweights may follow west of Shetland next year.
Under Phase 1, a 24-slot wellhead platform with bridge-linked accommodation will be linked to the Judy production platform to the east by a new multiphase pipeline. A new riser platform will be added at Judy, again connected to the existing platform by a bridge. Commingled gas processed at Judy will be transported to the UK mainland via the CATS offshore trunkline, with the liquids heading to Teesside, northern England through the Norpipe system.
WorleyParsons will provide detailed engineering for the new platforms and bridges, and functional design and specifications for the subsea facilities. Subsea 7 has been booked to install two associated pipeline bundle systems, power and communications cables, control umbilicals linking the subsea isolation valves, and tie-ins.
Among other new projects, Total has commissioned Petrofac to construct a 500 MMcf/d processing plant on the main Shetland Island to treat gas from the Laggan and Tormore fields to the west. ENI has won a license to convert the Deborah field in the southern North Sea to a 4-6 bcm gas storage facility, which could start operating in 2015. And Nexen Petroleum UK has contracted Penspen for a subsea FEED study for its multi-field Golden Eagle Area development in the central sector.
Reviews constrain UK license awards
Britain’s Department of Energy and Climate Change has issued 144 new offshore licenses under the UK’s 26th licensing round, with 45 further awards pending the results of more detailed environmental studies. The total of associated blocks is 268, with 99 more contingent on the outcome of the license reviews.
Among the winners, a partnership led by OMV gained three blocks adjoining the Tobermory and Bunnehaven discoveries west of Shetland. In the same region, Faroe Petroleum operates four new blocks in a little-explored play to the west of BP’s Clair oil field; and Hurricane Exploration secured part of block 204/23b, strengthening its position in an emerging basement oil play.
Malcolm Webb, CEO of industry association Oil & Gas UK, welcomed the awards, but was aghast at the European Commission’s suggestion that Britain, along with other member European states, should consider suspending oil and gas licensing until the Commission has reviewed their offshore safety regimes. Additionally, the Commission is seeking to introduce new pan-European Union prescribed safety standards. Webb said this would “run directly counter to the UK approach, which ensures that the risks associated with drilling programs are considered and reduced to as low as is reasonably practicable on a case by case basis. Any erosion of that system would jeopardize and not improve safety.”
UK operators may face further interference, with Greenpeace threatening court action last month in an attempt to block deepwater UK drilling, pending a full review of the Macondo incident in the Gulf of Mexico.
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