NORSK HYDRO TAPS OIL PAY IN TROLL GAS FIELD

Norway could face a short term lack of gas for new sales contracts following a successful long term test of a horizontal well drilled into the oil zone in Troll gas field in the Norwegian North Sea.

Norsk Hydro AS, Oslo, said the peak flow of more than 25,000 b/d from a single horizontal well in the western part of the field could ensure an oil production program starting in the mid-1990s and continuing for 15 years.

Troll, with 42.3 tcf of reserves, is undergoing first stage development of its prolific eastern lobe to begin gas sales to continental European customers in 1996.

CHANGE OF PLANS?

A second stage development covering Troll's western lobe has always been seen as the basis for continued gas sales to the U.K. or the continent in the latter part of the 1990s and early part of the next century.

Now, however, further development of western lobe gas reserves could be delayed until well into the next century to allow depletion of Troll oil reserves.

The western part of Troll holds an estimated 3.35 billion bbl of oil in place under the gas.

Before the test, Norsk Hydro's best estimate of recovery was 10%, but excellent results from the horizontal well jumped the recovery factor to 20% in the oil province and raised the prospect of figures higher than 10% elsewhere in the field.

A delay in developing all Troll reserves will end Norway's short term gas surplus just as demand for gas in continental Europe and the U.K. is increasing.

The result is the start of a change of policy by the Norwegian government and offshore operators. Licensing rounds will no longer avoid offering gas prone acreage, while operators may start drilling current licenses that have been put to one side because of the risk of finding unmarketable gas.

Longer term, development of Troll oil could advance a project to link the North Sea's gas pipeline system to substantial oil reserves in the Haltenbanken area off mid-Norway.

MORE GAS NEEDED

Eivind Reiten, oil and energy minister, says Norway's need for more gas discoveries is much greater than thought just 6 months ago.

Changes in the market in Europe, where demand for Norwegian gas is increasing, and possible changes in development of Troll field place new emphasis on gas discoveries and brighten the outlook for gas from the Haltenbanken area, he said.

The result of the Troll test came too late to influence the makeup of the 13th licensing round in which 52 blocks are on offer in the North Sea and more northerly regions. The offer avoids gas prone areas where possible.

"Nothing can be changed in the 13th round," Reiten said, "but for the coming 14th round we have to start now to prepare for a new approach," he said.

The minister said a year ago Norwegian policy was to concentrate the 13th, 14th, and 15th rounds on oil.

"Today we can say the 14th round will focus on gas," he said.

Reiten said offshore operators are taking a closer look at the possibilities of linking Haltenbanken into the North Sea gas pipeline network.

A year ago the government expected a Haltenbanken-North Sea gas pipeline link in 10-15 years.

"I think it might be much closer, but I'm not prepared to put any figure on it," Reiten said.

First Haltenbanken gas production likely will come from Heidrun field as feedstock for a methanol plant owned by Norske Conoco and Den norsk stats oljeselskap AS.

TROLL OIL TEST

Norsk Hydro used the Deepsea Bergen semisubmersible to drill its 31/2-16S horizontal well into the 72-84 ft thick oil pay in the western part of Troll field. The well went to 7,839 ft measured depth with a horizontal section of 1,640 ft.

The Petrojarl 1 floating test ship connected to the wellhead Jan. 5 and started production 5 days later. Production peaked at more than 25,000 b/d and has been averaging 23,500-24,500 b/d.

Norsk Hydro said performance of the well greatly exceeded the company's expectations. At the end of last month there was no sign of a gas breakthrough, which had been expected in April. Water cut was about 28%, as expected. The well proves the commercial viability of the zone, Norsk Hydro said.

The company will drill a second horizontal well into the thinner zone of 33-39 ft in the gas province. It is to be complete by yearend. Petrojarl 1 will then run a 3 month test of the zone early in 1991.

Norsk Hydro faces a fast track development for Troll oil regardless of results from the horizontal well in the thinner zone. Quick start-up is essential because reservoir studies have shown that production from the western lobe should start before 2005 to maximize gas recovery.

If the thin zone proves commercially unattractive, Norsk Hydro will consider a development project based on a single floating production unit, starting up in 1994 and reinjecting the gas.

The thicker oil province probably could be depleted with six to eight horizontal wells.

A successful horizontal test into the thin zone would mean two floaters to handle another 40 horizontal wells. Gas would be reinjected and exported through a link into the concrete wellhead platform that will be operating in the eastern part of the field beginning in 1996. This project also could start up in 1994.

The third option is a central production unit that would combine oil production, gas injection, and gas exports. However, the earliest date for start-up would be 1996.

Oil development studies cover only the undeveloped western part of the field. In the east, where most of the gas lies, the oil layer runs to a maximum of 10 ft.