Jeremy Beckman • London
Wintershall re-assesses Ravn
Wintershall Noordzee has proved further oil in the Ravn field on the western edge of the Danish North Sea. Ravn was discovered in 1986, but a discouraging appraisal well the following year caused the previous licensee to pull out.
This time around, Wintershall drilled a slanted well into the structure, 1.5 km (0.9 mi) south of the discovery, using the jackupNoble George Sauvageau. The well encountered hydrocarbon-bearing sandstones in the Upper Jurassic, and flowed oil on test. The License 5/06 partners will evaluate the results to determine whether economic production is feasible.
Denmark’s oil output for 2009 is likely to total around 15.3 MMcm (540 MMcf), according to a revised forecast by the Danish Energy Agency (DEA). This is 1% lower than DEA’s previous prediction issued last June, with continuing problems at the DONG-operated Siri field largely responsible. The agency has downgraded its estimate for Danish gas production by 12%, due mainly to DONG Naturgas opting to lower its purchase commitment.
Netherlands to support marginal developments
Late last year, the Dutch government approved an amendment to the country’s Mining Law designed to stimulate activity on offshore fields previously deemed uneconomic. According to the Dutch geological survey (TNO-NITG) and national utility Energie Beheer Nederland, the proposed measures could boost gas reserves recovery by around 750 bcf by 2020, also triggering 30 new field developments. Analysts Wood Mackenzie, however, point out that this reserves gain would equate only to a quarter of annual Dutch gas output. Further action would be needed, therefore, to halt the decline in offshore production, which Wood Mackenzie foresees from 2011 onwards.
The government’s action is driven by the likelihood that over the next two decades, many hubs and pipelines on the Dutch shelf will be decommissioned. Once they are removed, development of many smaller fields will be impractical.
Under the new measure, 25% of investment capex for marginal fields can be deducted from income taxable for State Profit Share. This applies through the end of a field’s first year of production, and exploration and appraisal costs also can be included in the deductible capital cost sum.
To qualify, fields must comply with two of three conditions, details of which remain to be clarified. These conditions are distance to nearest/usable infrastructure (probably a minimum of 5 km, or 3.1 mi), maximum reserve size, and low productivity levels. Eligibility must be determined before development starts, but Wood Mackenzie warns this process may end up causing further delays to projects.
Chrysaor states case for Solan
Chrysaor is pressing ahead with development of the stranded Solan oilfield west of Shetland. The London-based company has completed an 18-month appraisal program which involved drilling two wells on the structure, using the semisubByford Dolphin. The program, managed by Senergy, included two horizontal legs in the second well which was then suspended for re-use in the development.
Results from both wells were positive, allowing Chrysaor to refine its model of the Solan Jurassic field for its preferred production scheme. The development plan calls for two subsea producer wells and two subsea injectors tied back to a normally unmanned articulated tower with production facilities, tethered to a steel subsea storage tank. Oil would be offloaded every few weeks to a shuttle tanker. Chrysaor was hopeful of swift sanction, with a view to producing first oil in summer 2011.
UK Budget offers HP/HT stimulus
Britain has introduced new incentives to develop high-pressure/high-temperature fields. Last spring, the government unveiled a Field Allowance scheme to encourage investment in technically demanding projects, including HP/HT, which might otherwise be stalled in the current economic climate. In December’s Pre-Budget Report, the Treasury eased the qualification criteria, bringing eight further HP/HT fields into the net.
Industry associations Oil & Gas UK and The Oil and Gas Independence Association welcomed the expansion of the allowance, which can be offset against supplementary corporation tax. The government also confirmed it would look at ways to stimulate developments west of Shetland, which could generate up to one-fifth of the UK’s remaining reserves.
However, Andrew Ogram, a tax partner at Deloitte in Aberdeen, thought more could have been done. He claimed the government had ignored the industry’s calls for upfront credit for exploration drilling, as applied in Norway, to encourage exploration and appraisal activity. “A credit,” he added, “would have been particularly beneficial to smaller new entrants, who could be critical to maximizing the recovery of North Sea reserves. Calls for bolder steps, such as cuts in North Sea tax rates or incentives to encourage investment in existing fields, were also ignored.”
Statoil to speed up Aasgard throughput
Statoil plans to improve the flow of production through the Aasgard complex in the Norwegian Sea under a project known as “Aasgard Gas Transfer.” The program involves laying a new pipeline between the Aasgard B platform and a seabed template tied to the Aasgard A production/storage ship. Once the line is in place, eight wells currently providing pressure support will be converted into gas production wells.
Technip has contracted for the pipelay late this year, with the project due to be completed in 2011. Statoil claims the switch will allow for more production efficiency.
