Plan to sustain Norway's oil flow detailed

• Production outlook for Norway's main fields [91,750 bytes]

Government regulator Norwegian Petroleum Directorate (NPD) has laid plans to maintain Norway's oil production as major fields go into decline.

NPD says many of Norway's giant offshore oil fields-including Statfjord, Oseberg, Gullfaks, and Ekofisk-will come off plateau about 2000, requiring new discoveries and developments to maintain output.

Johannes Kjøde, project coordinator in NPD's forecasting and resource assessment department, said Norway's total oil and gas resource is currently estimated at 12.8 billion cu m of oil equivalent.

Kjøde says the range of uncertainty for the resource figure is 9.5-16.5 billion cu m oil equivalent, which includes an estimated 2-6 billion cu m of oil equivalent still to be discovered.

Developments, EOR

Norway has 53 fields in production or under development, including 12 that were put on hold by the government recently in a bid to reduce its capital commitments (OGJ, Mar. 16, 1998, p. 34.)

Kjøde said Norwegian operators have made 129 discoveries, which have not been approved, for development. Of these, 30 are expected to be developed within 10 years and a further 50 may be developed in the longer run.

In addition to new developments, NPD is also keen to promote enhanced oil recovery from producing fields. Kjøde said that currently producing oil fields and new developments are expected to yield 43% of oil in place, while currently producing gas fields and new developments have an anticipated recovery rate of 68%.

"NPD's target for the whole Norwegian continental shelf," said Kjøde, "is to recover 50% of oil and 75% of gas from current fields and discoveries, to bring in additional resources of 840 million cu m of oil and 480 billion cu m of gas."

Kjøde said this is a high recovery target compared with other oil-producing countries, but he contends that this will be made possible by new production technology and increased gas injection to boost oil output.

Remaining reserves

Of Norway's producing fields, Ekofisk still has the largest remaining reserves: almost 200 million cu m of oil and 800 million cu m of gas remain, compared with 200 million cu m of oil produced to date.

Norway's largest oil field, Statfjord, has total estimated reserves amounting to 631 million cu m of oil equivalent, of which 90% is oil. Statfjord has yielded 450 million cu m of oil and is expected to deliver a further 100 million cu m.

Of the total estimated resource figure of 12.8 billion cu m of oil equivalent for Norway, 8.7 billion cu m is in North Sea fields, 2.9 billion cu m in the Norwegian Sea off central Norway, and 1.2 billion cu m in the Barents Sea.

Kjøde said the resource total comprises 6.6 billion cu m of oil and 6.2 trillion cu m of gas. So far, 26% of the country's oil reserves and 9% of its gas reserves have been produced.

NPD reckons Norway's North Sea oil resource totals 4.817 billion cu m, of which 33% has so far been produced and 16% is anticipated discoveries; its Norwegian Sea oil resource totals 1.132 billion cu m, of which 5% has been produced and 35% is anticipated discoveries; and its Barents Sea oil resource is pegged at 288 million cu m, of which none has been produced and 84% of the total is anticipated finds.

Similarly, Norway's North Sea gas resource totals about 3.651 trillion cu m, of which 15% has been produced and 16% is so far undiscovered; its Norwegian Sea gas resource is 1.67 trillion cu m, including none produced, 21% in discoveries, and 53% undiscovered; and its Barents Sea gas resource totals 893 billion cu m, with none produced, 19% in discoveries, and 65% in anticipated finds.

Exploration success

Kjøde said that 1997 was the best year for exploration off Norway since the mid-1980s.

Operators made 17 discoveries with estimated reserves amounting to 300 million cu m of oil equivalent, split roughly one-third oil and two-thirds gas.

Kjøde claimed that Norway's exploration well success rate has been about 34% in the last 10 years, with the average discoveries during 1987-96 being 78 million boe.

In that period, Norway's operators made new oil discoveries of 3.5 billion bbl and discovered gas reserves amounting to more than 12.6 tcf. This equates to half of what Norway has produced to date.

Kjøde said NPD anticipates operators will drill about 30 wildcats/year over the next 10 years, continuing the recent typical rate. In 1998, operators are expected to drill about 230 wells in all, including development wells from platforms.

A similar number is anticipated in 1999.

Kjøde also said NPD had expected annual allocation of North Sea licenses to begin this year, in a bid to exploit prospects near existing infrastructure, but with the government's freeze on oil industry work, this is anticipated to start in 1999.

Norway's 16th exploration licensing round is now not expected until 2000, when the focus will be Norwegian Sea areas.

New allocations in the Barents Sea are not anticipated until after 2000.

Outlook

"We expect Norwegian oil production to reach a plateau of 3.8 million b/d around the turn of the century," said Kjøde, "and then decline from around 2006.

"In 1997, Norwegian oil and natural gas liquids production averaged 3.2 million b/d, of which NGL accounted for about 150,000 b/d. But our production forecasts are continually increasing because of technological improvements."

Much of the past increased output has come through work in Statfjord, Gullfaks, Oseberg, and Ekofisk. These fields are now in decline, and NPD aims to replace their contribution with smaller fields.

"By 2000, almost all of Norway's producing fields will be in decline," said Kjøde. "The big four, which have produced more than half of Norway's total output since the 1970s, will contribute less than 50% for the first time this year."

Norway currently exports 40 billion cu m/year of gas and expects to double this to 80 billion cu m.

So far, it has committed to sales amounting to 76 billion cu m/year beyond 2000.

Norway uses little of its own gas in the domestic market.

Total costs for Norway's offshore operations are expected to peak in 1999 at 95 billion kroner ($13 billion).

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