Oil & gas activity North West European Continental Shelf

September 1, 2011

OE's popular annual guide to oil & gas developments on the Northwest European Continental Shelf returns, fully updated.

Operators in the UK sector of the North Sea were taken aback in March this year by UK Chancellor George Osborne's decision to raise the supplementary tax rate from 20% to 32%, giving rise to severe warnings of a cut back in activity from a number of operators (OE April). The impact has been slightly softened since by the government's declaration that the ring fence expenditure supplement was being raised from 6% to 10%, effective July, to help marginal oil fields.

Deloitte's mid-June assertion that second quarter drilling activity in the UKCS was 52% down on the same period last year did little to calm industry nerves, suggesting that the long-term ramifications of the Chancellor's tax raid have yet to be fully revealed. Although stressing that the number of wells involved was small, Deloitte's Graham Sadler said the reduction was ‘concerning' and attributable at least in part to ‘possible initial reaction to the UK's shifting fiscal regime'.

New production start ups this year included Centrica's innovative, self-installing and re-usuable F3-FA gas platform in the Dutch sector (OE January).

Even against this background of uncertainty, however, there has still been a high level of field development activity in the North Sea over the past year as the industry has started to emerge from the credit crunch. Several projects have moved into the development stage, and there have been a number of environmental statements submitted for proposed future developments.

In the UK sector, Ithaca gained approval for the Athena oil development in September last year and Wintershall for the cross border Wingate field. E.ON Ruhrgas' Huntington oil field was approved in November 2010. ConocoPhillips won approval for the HP/HT Jasmine gas/condensate field in October 2010 and BP for the Devenick gas/condensate field in December. Endeavour's Rochelle gas condensate field was approved this February.

Centrica gained approval for the Ensign gas field, RWE-Dea for the Clipper South gas field, and Taqa for the small Falcon oil field in March 2011. Approval for BP's Quad 204 redevelopment, involving the replacement of the existing Schiehallion FPSO, came in June, and for Nexen's Blackbird field as a tie-back to the Ettrick FPSO in August.

Environmental statements currently being processed in the UK sector include: Maersk Oil for Flyndre/Cawdor tied back to Clyde; Valiant Petroleum for the Causeway development as a tie-back to the Taqa-operated Cormorant North platform; BG Norge for the cross-border Knarr development (previously known as Jordbaer) with an FPSO in the Norwegian sector and an export route for the gas via the UK sector FLAGS system; Dana Petroleum for the Western Isles project comprising the a joint development of the Melville and Rinnes discoveries in the northern North Sea via a newbuild FPSO; Enquest for Conrie via the Northern Producer; for the Golden Eagle area comprising the development of the Golden Eagle, Hobby and Pink discoveries. The plans for Golden Eagle call for two fixed platforms and two subsea drilling centres.

The Norwegian Storting approved PDOs for ConocoPhillips' Ekofisk South and Eldfisk II projects on 9 June – 40 years to the day since oil production began on Ekofisk in 1971. Ekofisk South entails building a new wellhead platform, 2/4 Z, bridge-connected to the Ekofisk complex, and a seabed facility for water injection. Eldfisk II comprises a new integrated platform (wellhead, process and living quarters), Eldfisk 2/7 S, connected to the existing Eldfisk Complex.

The PDO for Statoil's Valemon gas and condensate field, one of Statoil's largest development projects on the Norwegian continental shelf in the next few years, was also approved in June. Development of Valemon involves a fixed platform with a steel jacket for the separation of gas, condensate and water. The normally unmanned platform will be remotely controlled from the Kvitebjørn platform when drilling operations are completed in 2016/17.

Statoil has submitted PDOs this year for a number of fast track developments, including Vigdis NE via Snorre and Sternje (formerly Katla) as a tie-back to Oseberg South. It has already received approval for Visund South (comprising the Pan and Pandora finds) to be tied back to Gullfaks C, which is being developed in conjunction with the Marulk development, which Statoil is carrying out on behalf of operator Eni; and for Hyme (formerly Gygrid) as a tie-back to Njord. Total submitted a PDO for the Alta (previously David) gas condensate field in July.

The Danish Energy Agency is processing an application by Dong E&P for the development of the Hejre field, in the northern part of the Danish Central Graben. The application contains a plan for execution of one offshore installation and five production wells. Dana Petroleum has won approval from The Netherlands authorities for the Medway integrated oil and gas development, which comprises the tie-back of the Van Nes and Van Ghent fields via two subsea wells to the DeRuyter platform.

Start-ups since OE's activity tables were last published include Talisman's UK sector Burghley oil field in October last year and Auk North in November, GDF Suez's Norwegian sector Gjøa field in November and Statoil's Vega field in December. New production start-ups this year include Centrica's Dutch sector F/3-FA and Total's K/15-CU gas fields in January, Dong's cross-border Trym field in February, ExxonMobil's UK Loirston field in March and Statoil's Norwegian Sleipner Beta West in April.

Mergers and acquisitions continue apace, both in the oil company and the contractor sectors. The Korea National Oil Corporation has acquired Dana Petroleum, although the company is still known as Dana. Enquest formed last year in a demerger of assets by Petrofac and Lundin Petroleum, has bought Toronto-listed Stratic Energy. Oranje-Nassau Energie, the privately-owned energy company based in the Netherlands, has acquired Toronto-listed Cirrus Energy Corporation.

The refurbished topsides of Perenco's decommissioned UKCS Welland platform will be redeployed on another Perenco platform, thi time off West Africa (OE April).

Bridge Resources has sold its wholly owned UK subsidiary Bridge North Sea to Perenco UK. BP has agreed to sell its interests in the Wytch Farm, Wareham, Beacon and Kimmeridge fields to Perenco UK. Tullow has acquired Netherlands-based Nuon Exploration & Production from Sweden's Vattenfall Group. Valiant Petroleum is buying Norwegian exploration company Sagex Petroleum.

SLP Engineering has been sold out of receivership to Zefier UK III, a subsidiary of the Smulders Group, while SLP Production has been rebranded as the OGN (Offshore Group Newcastle) Group. Halliburton has bought well control specialist Boots & Coots. GE Oil & Gas has acquired Dresser, John Wood Group's well support division and Wellstream. Wood Group has bought PSN.

Fugro has acquired JDR Cable Systems' Marine Cable division in the Netherlands, Riise Engineering and TS Marine. Amec has taken on project delivery company qedi, acquired a majority shareholding in Australian-based S2V Consulting and bought Australian engineering consultant Zektingroup. Apply Sørco has bought Altra Energy. Oceaneering has acquired Norse Cutting & Abandonment.

The merger of international contractors Acergy and Subsea 7 was completed in January. Stork Technical Services and Arle Capital Partners acquired RBG, the UK-based supplier of inspect, assess and repair services in May. Subsea services group Acteon acquired Aberdeen-based NCS Survey in June.

On the licensing front, the UK's DECC is eyeing a 27 January 2012 launch of the UK's 27th offshore licensing round. In October 2010 it awarded 83 companies – including five newcomers – 144 licences covering 280 blocks in the 26th offshore round. In April 2011 the Norwegian energy ministry awarded 29 companies 24 licences in Norway's 21st round, comprising 12 in the Barents Sea and 12 in the Norwegian Sea. A total of 15 companies have submitted applications for acreage in Ireland's Atlantic Margin licensing round – 996 full blocks and 58 part blocks were on offer – which closed in May 2011.

Some of the older fields are adding additional compression. Talisman is adding a compression upgrade module to Claymore. Statoil is eyeing seabed compression for Gullfaks South, on Åsgard to help increase pressure from the Mikkel and Midgard reservoirs, and with operator Shell on a seabed solution on Ormen Lange. Nord Stream completed the first of its two 1224km pipelines in just over 12 months in the spring. Construction for line two is scheduled for completion in 2012. The new pipeline will start transporting gas from the Russia to the EU in late 2011. When both lines are operational in late 2012, Nord Stream will have the capacity to tranport 55bcm/year.

On the decommissioning front, in the Southern North Sea, Perenco has successfully brought ashore the Welland platform in January for reuse on a company project offshore in Cameroon, West Africa. Work on the Ekofisk cessation project continues with the removal of the Norpipe 37/4A booster platform. Statoil, on behalf of operator Gassco, has awarded letters of intent to AF Decom Offshore and Saipem UK for removing the redundant H7 and 2/4-S platforms by the end of 2014. Premier has released the FPSO Sevan Voyageur from the depleted Shelley field for re-use on the Huntington field, and decommissioned the field itself.

BP is looking at the decommissioning of the Valhall 2/4G riser platform and the Amethyst and Miller platforms. CNR International is carrying out study work into the removal of the Murchison facilities and the Ninian Northern platform. BG is initiating a decommissioning process for Atlantic and Cromarty, and also exploring alternative uses for the facilities. Statoil is in the process of decommissioning the TOGI (Troll Oseberg Gas Injection) facilities, and is also mulling the abandonment of the Statfjord A concrete platform. Shell continues to develop Brent decommissioning plans.

Eni has been awarded a gas storage licence for the depleted Southern North Sea Deborah field. Bacton Storage (a joint venture between Centrica and Perenco) has submitted an application to develop the Baird gas field for storage. At 81bcf, Baird will be the second largest gas storage facility in the UK after Rough. Shell and ExxonMobil are offering the Corvette field for sale as a potential underground gas storage site.

The Norwegian ministry of petroleum & energy has invited the industry to nominate suitable areas in the North Sea and the Norwegian Sea for exploration for potential reservoirs for permanent storage of CO2 from Mongstad. The deadline for nominations is 4 October 2011. OE



Current News

Enauta Gets Nod for New Atlanta Field Plan. Concession Extension Granted, Too

Enauta Gets Nod for New Atlanta Field Plan. Concession Extension Granted, Too

UK Picks Offshore Wind Champion. Opens $200M Floating Wind Fund for Expressions of Interest

UK Picks Offshore Wind Champion. Opens $200M Floating Wind Fund for Expressions of Interest

Trillion Books Uranus Jack-up Rig for Drilling in Turkish Black Sea

Trillion Books Uranus Jack-up Rig for Drilling in Turkish Black Sea

Norway's April Oil Output Lags Forecasts by 10.6%

Norway's April Oil Output Lags Forecasts by 10.6%

Subscribe for OE Digital E‑News

Offshore Engineer Magazine