Phillips Petroleum Co. Norway and Norway's Ministry of Industry & Energy (MIE) have tentatively agreed on an amended plan for redevelopment and long term operation of Ekofisk oil and gas field.
The plan, designated Ekofisk IIA, aims to cut operating costs and allow maximum recovery of reserves from the giant field in the Norwegian North Sea. Its cost is pegged at $3 billion'
Additional recoverable reserves in the Ekofisk production license after 2011 are estimated at more than 280 million bbl of oil equivalent.
Ekofisk II, which Phillips submitted to Norwegian authorities last March, was spawned by safety concerns as a result of seabed subsidence (OGJ, Mar. 21, p. 39). Its adoption requires approval by the Phillips board, members of the Phillips Norway group, and Norway's Storting (parliament).
Phillips expects formal approval of Ekofisk IIA in the fall session of Storting.
WHAT'S AGREED
Under Ekofisk IIA, Phillips will install two new platforms-a wellhead platform to be finished in 1996 and a combined process and transportation platform to be finished in 1998. Both will be linked with the existing Ekofisk complex.
MIE agreed to extend the Phillips group's production license for Ekofisk area fields from its current expiration in 2011 to a new term ending in 2028. MIE also agreed to eliminate the royalty charged on oil production upon completion of Phillips' construction project, currently estimated for late 1998.
MIE agreed to recommend to Storting that Norway pay 5% of Ekofisk IIA costs and in return receive a 5% direct interest in the Ekofisk production license starting Jan. 1, 1999.
In addition, MIE is to extend pipeline licenses held by Norpipe AS to 2028, subject to increased state ownership. Norpipe owns and operates the gas pipeline from Ekofisk to Emden, Germany, and the oil pipeline from Ekofisk to Teesside, England. Norpipe is currently owned 50% by the Phillips group and 50% by Norway's Den norske stats oljeselskap.
The license for the oil pipeline would otherwise expire in 2005, and the license for the gas pipeline would expire in 2007. After 2005 for the oil pipeline and after 2007 for the gas pipeline, ownership will be 30% Phillips group and 30% Statoil, with 40% owned directly by the state.
Present shipments are about 560,000 b/d to Teesside and 2 bcfd to Emden.
Ekofisk partners are Phillips 36.96%, Norsk Fina AS 30%, Norsk Agip AS 13-04%, Elf Petroleum Norge AS 7.594%, Norsk Hydro AS 6.7%, Total Norge AS 3.547%, Statoil 1%, Elf Rex Norge AS 0.855%, and Norminol AS 0.304%.
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