Statoil studies deepwater development options

Concepts Under Study by Statoil [19986 bytes]

State owned Den norske stats Oljeselskap AS is assessing field development options as Norwegian operators prepare for deepwater exploration and development on acreage awarded in the 15th licensing round.

Statoil sees floating production systems as one of the key technologies in deep water, where most undiscovered big fields are believed to lie.

Statoil's key deepwater target on Norway's 15th round acreage is License 217 area of the Norwegian Sea covering Blocks 6706/11 and 6706/12 in the Voering basin area, 250 km offshore.

Water depth there is 1,200-1,500 m. The nearest field is Statoil's Norne, 150 km to the south, under development with a floating production, storage, and offloading (FPSO) system in 380 m of water.

Norne is Norway's northernmost development. It also is in the deepest water to see development off Norway.

"We think many of the technical elements of Norne can be stretched for even deeper water," Jonas Odland, Statoil's manager of field development technology, told Oil & Gas Journal. He believes advancing the Norne concept to 1,200 m of water from 380 m would be technically and economically feasible.

Development options

Statoil is studying five main development concepts for deepwater, harsh environment fields:

Concept 1 is an FPSO with subsea templates, as used in Norne. This approach requires a drilling rig for all well work, making operations costly when day rates are high.
Concept 2 is similar to Concept 1 but with a drilling rig on board the FPSO. The problem with this could be congestion around the turret and risers, but Odland said the idea is feasible with use of a compact drilling rig.
Concept 3 is a semisubmersible rig with a storage and offloading vessel. The main disadvantage is the need for a separate storage unit and hence an additional mooring system, which would prove a limitation in deep water.
Concept 4 is a deep draft floating platform, with wellheads on the topsides rather than on the seabed, and a loading buoy.
Concept 5 involves a tension leg platform and a storage and offloading tanker, a proven technology.

For milder sea and weather conditions, such as offshore West Africa, Statoil is studying less costly development concepts, including use of a barge with subsea templates and a barge linked to wellhead platforms.

Norne costs

Odland said the total cost to produce Norne oil for the entire field life works out to $6.58/bbl. The figure includes capital, operating, and transportation costs discounted at 7%.

"For a deepwater application of this concept, mooring and riser costs, even if doubled, would not be a major part of capital expenditure," Odland said.

"Similarly, well maintenance would not necessarily become a major component of operating expenditure, given a favorable reservoir, although low productivity could change the picture significantly.

"So for a development similar to Norne at 1,200 m water depth, the increase in unit cost would be $1-2/bbl, which would still be a very good prospect for an oil price of $16-18/bbl."

Deepwater holdings

Statoil owns deepwater interests virtually around the world.

In Europe, its acquisition last year of Dublin's Aran Energy plc brought it exploration and development interests west of Ireland and a small share in West of Shetland development under way off the U.K. by BP Exploration Operating Co. Ltd.

The Aran purchase gave Statoil assets stretching along deepwater margins of the European Continental Shelf from west of Ireland to north of Norway in the Barents Sea.

Statoil also is involved with BP in exploring Nigeria's deepwater area and in the Caspian Sea, which long term is likely to emerge as a deepwater play.

In addition, Statoil has a technology agreement with Brazil's Petroleo Brasileiro SA in which deepwater experience is shared and an involvement in Gulf of Mexico deepwater research through an alliance with BP.