The Phillips Petroleum Co. Norway group last week submitted a third possible plan for redevelopment of giant Ekofisk oil and gas field to Norway's Ministry of Industry & Energy.
The company also let a contract for design of a process and transportation platform to be used in the project in the Norwegian North Sea.
The latest plan, called Ekofisk IIA, changes an earlier plan, Ekofisk II, submitted to the ministry last Dec. 31 as one of two alternatives for a redevelopment project caused by safety concerns as a result of seabed susidence.
One of the alternative plans involved replacement of the tank platform. The other involved radical redevelopment of the field at a new site, which would extend field life well into the 21st century (OGJ, Jan. 10, p. 33).
The first alterative, Ekofisk 2011, was priced at $2-3 billion and would take the field to expiration of its production license in 2011. Ekofisk II carried a $3-4 billion price tag but depended on exemptions from royalties to make redevelopment viable.
"The oil price has gone down about $5/bbl since we formulated the Ekofisk II plan," said Knut Aam, managing director of Phillips Norway.
"Coupled with signals from the authorities that we could not count on exemption from stricter taxation, this provided strong incentives to arrive at a less costly solution."
With initial capital expenditures of about $3 billion to the Phillips group, Ekofisk IIA forms the basis for the efficient, economic, long term operation of the Ekofisk area, Aam said.
WHAT'S PLANNED
Ekofisk IIA calls for construction of two platforms - a wellhead platform to be completed in 1996 and a combined process and transportation platform to be completed in 1998 and linked with the current Ekofisk complex.
Ekofisk IIA also sets out these conditions on which agreement must be reached with Norwegian authorities:
- Extension of existing production and pipeline licenses through the life of the field.
- Elimination of the royalty on oil and natural gas liquids production.
- Deferred removal of existing facilities until at least 2011.
- Other fiscal incentives for members of the Phillips Norway group.
Phillips anticipates a recommendation about the Ekofisk development by Norwegian authorities in the spring session of Storting, or parliament, and that Stoning will make its decision later in the spring session.
Phillips let an 80 million kroner ($10.6 million) contract for preliminary engineering work on the new process and transportation platform to Kvaerner AS, Oslo.
Kvaerner said total value of detailed engineering work could be 600 million kroner ($81 million) if the Ekofisk IIA plan is approved by Norway. Work will begin at Kvaerner's head office in April.
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