Jeremy Beckman • London
Hydro/Marathon in joint talks
Norsk Hydro is looking to submit a development plan by late this year for its 120-MMbbl Klegg oilfield, discovered last September in North Sea license PL036. According to Exploration and Development VP Lars Christian Alsvik, it should be possible to achieve a good rate of recovery due to natural pressure support from the water zone, but gas lift or injection would probably be needed in the wells and pipeline. Hydro foresees a subsea development, probably through the Heimdal platform 11 km southeast, although other installations nearby have not been discounted.
Alternative options are also being discussed with Marathon, a 46.9% partner in Klegg. These could involve a cluster development with Marathon's Alvheim field, the new name for its Boa, Kneler, and Kameleon discoveries in PLs 203, 088 BS, and 036C. Here, total reserves are estimated at 200-250 MMboe, with four more exploratory wells planned in the area this year and next. Alvheim could be developed through an FPSO, a new platform, or a subsea tieback. Marathon is expected to decide shortly.
In the Norwegian Sea, Hydro has formally submitted the partners' development plan for the Ormen Lange gas field, with a price tag of NKr66 billion, including NKr19.5 billion for the project's various pipelines. One of the latest high-profile contract awards, valued at NKr1 billion, went to FMC Kongsberg Subsea, for the subsea production system. The initial delivery scope includes two subsea templates with manifolds, eight christmas trees, control and intervention systems, and tees into Ormen Lange's 30-in. gas trunklines.
Norway opens mature sectors to prospectors
Eight companies, including four relative newcomers to Norway, have been granted operatorships in the country's latest licensing round. A total of 19 production licenses have been issued, covering 39 blocks and part-blocks in the North Sea and Haltenbanken off Mid-Norway, in acreage close to producing infrastructure. Under new terms introduced by the Petroleum & Energy Ministry last May, partners in these licenses must work quickly to promote exploration, leading (if successful) to probable development. Acreage not actively explored or brought to a development decision will be rescinded, and re-submitted to others in future licensing rounds.
The "big two" of Statoil and Norsk Hydro picked up over half the operatorships on offer. One of Statoil's four licenses covers acreage east of Norne, where it has been attempting with limited success to find new reserves to justify a multi-field subsea development. Two others are close to its Sleipner and Kristin complexes. Hydro's six awards include an area adjacent to its recent Klegg discovery, near the Heimdal production center.
Klegg may be developed jointly with the Marathon-operated Alvheim discoveries (see story below). In this area, Marathon itself gained two new licenses.
Further awards went to Talis-man Energy (two), which entered the sector only last summer after buying BP's interests in Gyda and Ula, while BP, Esso, DNO, BG, and Paladin Resources each secured one new license. Pala-din's block S 7/11 lies north of acreage it also operates on the UK side of the North Sea median line, containing an extension of the undeveloped Blane discovery. An exploratory well is planned on S 7/11 later this year. BG's award, covering part-blocks 1/2, 5, and 6, represents its first work-out in Norwegian waters.
In its latest budget statement, the Petroleum & Energy Ministry expects investment throughout the Norwegian shelf to total NKr75.5 billion in 2004, up from NKr66.6 billion last year. Daily crude production should be roughly the same, at around 2.9 MMb/d, while gas exports should rise from 72 bcm to 75 bcm. The government itself expects to up its investments in petroleum sector R&D by 25%, to NKr140.5 million. Of this, NKr30 m will be used to establish Petromaks, a program designed to improve exploration, partly through developing new geophysical measurement techniques, and also enhanced recovery, through new technologies and processes relating to reservoir management and gas off-take.
Sanction at last for Buzzard
Britain's Department of Trade and Industry has approved the country's largest new field development since BP's Schiehallion in 1995. Buzzard, discovered in 2001 in Upper Jurassic sandstones in the Outer Moray Firth, has estimated recoverable reserves of 460 MMbbl, twice that of Clair, the only other sizeable new UK oilfield project. Operator EnCana also sees strong exploration and development upside in the surrounding acreage.
The $2-billion production scheme, designed by London-based CB & I, John Brown, is based around three bridge-linked, steel piled platforms with facilities for drilling, production, and utilities/accommodation. The location is across four blocks in 100 m of water, 55 km northeast of Peterhead.
Associated equipment will include two subsea water injection manifolds situated 2 km from the platform complex. Crude will be exported through the Forties system to Cruden Bay via a 28 km, 10-in. pipeline from Buzzard's process platform. Surplus gas will be sent from the same installation to St. Fergus through a 29 km, 10-in. line connecting to the Captain field tee into the Frigg trunkline. After five years or so, as Buzzard's gas depletes, supplies will be imported through the same system to fuel power generation on the platforms.
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Aker Verdal in Norway is building the three jackets, but at press time, only the 3,650-ton wellhead deck had been awarded to Burnt-island Fabricators in Methil, eastern Scotland. The jackup GSF Galaxy III has a two-year development drilling contract, starting 3Q 2005, with options for a further two years.
The full program could comprise 53 development wells, including 27 producers. Eight of these will be pre-drilled, with the skid-mounted rig located next to the wellhead platform, and these wells should be available for the projected production start-up late in 2006. Plateau output of 180,000-190,000 b/d should be attained by mid-2007, and according to analysts Wood Mackenzie, this will represent more than 10% of UK continental shelf production. Thereafter, reservoir pressure will be sustained through waterflood, using produced water, supplemented by treated seawater. Sixteen water injector wells will be drilled, with infill wells added late in field life to improve production.
New infrastructure arising from this project should in turn promote development of fallow small fields in the area, such as Ettrick. Additionally, a large number of exploration blocks south and west of Buzzard were taken up in the UK's 21st offshore licensing round last July. EnCana itself was awarded eight blocks in this area, which carry a total of six commitment wells, the same number drilled by the company on the UK shelf in 2003.
