STATOIL LOOKS TO NEW AREAS TO BOLSTER PRODUCTION

Feb. 20, 1995
Norway's Den norske stats oljeselskap AS plans an exploration campaign aimed at opening new areas of the Norwegian shelf while it squeezes existing producing assets to increase profits. Statoil placed North Statfjord subsea oil field on production last month as a satellite of Statfiord C platform as it was probing nearby prospects.

Norway's Den norske stats oljeselskap AS plans an exploration campaign aimed at opening new areas of the Norwegian shelf while it squeezes existing producing assets to increase profits.

Statoil placed North Statfjord subsea oil field on production last month as a satellite of Statfiord C platform as it was probing nearby prospects.

Meanwhile, much of the attention of Statoil and other Norwegian operators during the next 10 years will focus on acreage in the Norwegian Sea off mid-Norway. This year's 15th licensing round will include Voring basin blocks off mid-Norway, as well as North Sea acreage.

The 16th round will center on the Barents Sea, where oil exploration to date has been largely unsuccessful. The 17th round will return to Norwegian Sea and North Sea blocks.

NORTH SEA

Tor Fjaeran, Statoil vice president for exploration and development off Norway, told Oil & Gas Journal the North Sea will remain Statoil's main exploration area.

Most of last year's 14th round blocks were awarded near existing infrastructure. Oil companies' 15th round North Sea nominations included blocks east of Troll field and open tracts in the Viking graben area.

Most interest from companies was in the area between Frigg and Sleipner fields. In the Frigg area, companies have been exploring Tertiary plays in recent years.

In September 1994, Esso Norge AS and Enterprise Norge AS found Ellie oil field in Block 25/8 that could be the key to opening other fields for development in the vicinity

Esso has its Balder prospect nearby, while Fjaeran said the Hermod and Hanna prospects might also see production in development centered on Ellie and Hermod (OGJ, Nov. 14,1994, p. 36).

For Statoil, exploration around Statfjord and Gullfaks fields would be very important, said Fjaeran, so future production could be linked to existing platforms.

NORWEGIAN, BARENTS SEAS

The Norwegian Sea 6204/11-1 wildcat drilled late in 1994 found an oil field Fjaeran believes is Statoil's most promising discovery of last year (OGJ, Jan. 23, Newsletter).

An appraisal well will be drilled on the prospect this year. Timing of the well will depend on environmental considerations.

Fjaeran said all Norwegian Sea licenses are of interest because the area is a high risk/high reward play with good Tertiary prospects.

Fjaeran also is convinced the Foinaven discovery west of Britain's Shetland Islands could be a play with great similarities to the Voring basin in the Norwegian Sea.

There is no drilling planned in the Barents Sea this year, after last year's disappointments, and almost no seismic data will be acquired (OGJ, Feb. 28, 1994, p. 30).

Fjaeran said the Barents Sea combine, originally a move by Statoil, Norsk Hydro AS, and Saga Petroleum AS to pool data on Barents Sea exploration, has been expanded to include Mobil Development Norway AS, Amoco Norway AS, and Elf Petroleum Norge AS.

The group was to report to government Jan. 31, giving recommendations on further exploration in Norway's Barents Sea area. Reservoirs estimated to hold a total of more than 5 tcf of gas have been found there.

STATFJORD ACTIVITY

Oil production from North Statfjord began Jan. 23 in a development said to be part of the North Sea's most extensive subsea program.

North Statfjord lies 17 km from the Statfjord C mother platform, setting a world mark for transport of unprocessed well streams.

Statoil said development of North Statfjord and companion East Statfjord, placed on stream last October, will yield 300 million bbl of oil from six seabed installations in a total 7.5 billion kroner ($1.1 billion) development.

Plateau production from the two fields is expected to reach 140,000 b/d. North Statfiord reserves are estimated at 170 million bbl of oil, and early production from two wells is expected to reach about 38,000 b/d. Field production is to reach 75,000 b/d by yearend.

Production from North Statfiord and the similar East Statfjord satellite that lies 7 km from Statfjord C, is expected to help extend the field life of the Statfjord complex.

Statoil late last year disclosed a plan to shut down one of Statfjord's three large production platforms in a move designed to maintain viability of the field as production declines.

Berit Tvedt, Statfjord planning manager, told OGJ Statfiord is about to enter a transition phase.

Production from the main reservoir has been on a plateau at about 700,000 b/d for the past 9 years. Production from the main field is expected to decline sharply to about 25% of current volumes by 2001.

Tvedt said, "Statfjord cash flow would become negative around 2003. Therefore, field life would end then under the current regime and without production from other fields."

Without a change to Statfiord operations, income would decline during 1995-99. Because safety and environmental standards must be maintained despite declining production, continued operation of the field as it stands would become too costly

"We needed a dramatic change," Tvedt said, "so we sketched a plan for production to 2009, the end of the Statfjord license period. Changes can be made more radical if you are planning for the field's life."

Cost improvements to operations and a recent increase in estimated remaining reserves by 220 million bbl because of new depletion methods would extend field life to 2007 from 2003.

Closure of A platform in the field's center will require rerouting of Snorre field oil production to another Statfjord platform and drilling of more wells to deplete the central area with the B and C platforms. But closure of A platform will extend Statfjord's field life beyond 2009 for oil prices above $12/bbl. This is because of the saving on A platform operating costs.

Tvedt said the Statfjord license group is obliged to pay the cost of redirecting Snorre production for third party operator Saga. Because A platform accounted for 40% of Statfiord operating costs, the cost of Snorre pipeline changes would be covered.

Statoil intends to mothball the A platform so it can be returned to production if future discoveries justify it.

"We do not think everything has been found near Statfiord," Tvedt said. "There are still lots of prospects in the area, although Statfjord eventually will have to compete with Statoil's Gullfaks development for future third party business."

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