North West European Continental Shelf - oil & gas activity

September 2, 2010

The effect of the continuing credit crunch last summer meant that North Sea field development activity was down last year, but the steadying of the price this spring has led to projects being dusted off in both the UK and the Norwegian sectors.

Future deepwater drilling plans, however, are under review following the catastrophic Deepwater Horizon blowout in the Gulf of Mexico in April, and the ongoing leak, which operator BP is still struggling to control permanently. Governments and regulatory authorities are reviewing safety measures and oil spill safeguards.

There have been a number of mergers and acquisitions. Centrica acquired Venture Production in August last year. Det norske oljeselskap has merged with Aker Exploration, creating the second largest company operating on the Norwegian Shelf, both in terms of operatorships and exploration activity. StatoilHydro changed its name to just Statoil in November.

Lundin Petroleum and Petrofac formed a new company, EnQuest, in March to own and operate their UKCS oil and gas assets. Lundin will own a 55% interest in EnQuest, Petrofac 45%. Bridge Energy and Silverstone merged in March to become Bridge Energy UK. Dana Petroleum acquired the Netherlands assets of PetroCanada, a wholly-owned subsidiary of Suncor Energy in June this year.

On the contractor side, international subsea contractors Acergy and Subsea 7 are to merge. Bokn Invest, a joint ownership company set up by Aker Capital Fund, HitecVision and Camar, has bought Norwegian contractor Bjørge. FMC has acquired Stavanger-based Multi Phase Meters. Fugro has bought Perth-based Submec, a privately owned business which provides subsea engineering and remote intervention tooling services to the offshore oil and gas industry throughout Australasia.

The UK’s DECC has received applications for 356 blocks in the 26th licensing round, the highest number since the first round in 1964. Norway launched the APA 2010 round in February, offering acreage in the Norwegian Sea and the Barents Sea, as well as in the North Sea. The deadline for applications is 15 September, with awards expected to be made at end 2010/early 2011.

In June, the Norwegian energy ministry offered 94 blocks and part-blocks in the Norwegian Sea and Barents Sea in the 21st licensing round, which has a deadline of 3 November, with awards expected in spring 2011. The ministry has trimmed the number from an initial list of 100, but has retained 12 deepwater blocks. Two of the blocks removed are in the North Sea, in an area that may contain new shipping routes. The other four are near the coast of northern Norway and were removed pending further studies on spill scenarios. All 43 deepwater blocks in the Norwegian Sea remain on offer, but the ministry has said it will keep a close eye on information from the Gulf of Mexico oil spill investigation when awarding licences.

Irish energy minister Conor Lenihan also announced details in June of Ireland’s 2011 Atlantic Margin licensing round. This round will be the largest licensing round to date, covering an area of just over a 250,000km2, comprising 996 full blocks and 58 part blocks. The area on offer extends from about 30-380km from shore with water depths typically ranging from 200m, or less, to over 3000m.

The UK’s DECC only approved one offshore field in 2009, Talisman’s Burghley oil field as a tieback to the Premier-operated Balmoral floater. Total received approval in March this year for the Laggan and Tormore deepwater gas fields in West of Shetland. Production from the fields will be transported through two 141km, 18in diameter pipelines to a new processing plant at Sullom Voe. From Sullom Voe the processed gas will be delivered to the mainland via a new 222km, 20in pipeline linking into Total’s existing Frigg UK trunkline at the MCP- 01 bypass.

March also saw approval for Apache’s Maule oil field, to be developed by extended reach drilling from Forties, while approval for Apache’s Bacchus as a subsea tieback to Forties came at the end of June. Total received approval mid-July for the development of the Islay gas field via Alwyn.

The pace of field development is now increasing, and a number of UK operators have submitted environmental statements for proposed developments. BP is mulling Devenick as a subsea tieback to East Brae and a further development of the Andrew area focusing on Kinnoull. It is also progressing Clair Ridge, West of Shetland. BG would like to develop the Norwegian sector Gaupe field as a tieback to Armada and a fourth phase of Everest.

ConocoPhillips is planning three platforms for the development of Jasmine. Ithaca Energy wishes to develop Athena as a subsea tieback to the FPSO BW Carmen. RWE Dea is planning a new platform for Clipper South tied back to LOGGS and for Breagh tied back to Teesside. Total is looking at a new wellhead platform for West Franklin. Wintershall is considering developing Wingate via a new, not normally manned installation tied back to its Dutch sector D15-FA1 platform.

Serica has agreed a deal with BG, as operator of the Lomond field, and Dana Petroleum, as operator of the Arran field (formerly Barbara and Phyllis), under which BG will carry out FEED work for a bridge-linked platform that will connect with the Lomond platform and provide gas and condensate reception facilities for Columbus and Arran production.

Fairfield Energy, following the acquisition of blocks 211/27a & c from BP, Cieco, ExxonMobil and Shell, plans to redevelop the UK Northern North Sea NW Hutton field. Production from NW Hutton ceased in 2003. Decommissioning of the existing field facilities has started and will be completed by the current partners.

The plan for development and operation of Statoil’s North Sea Gudrun field was approved by the Norwegian Parliament in mid-June. Production is scheduled to start in 1Q 2014. The platform will have a processing facility for partial processing of oil and gas, before the hydrocarbons are piped to the Sleipner field. Norway approved the PDO for the BG-operated Gaupe field (formerly Pi) in PL292, in the Norwegian North Sea at the end of June. First production from Gaupe is expected in late 2011. It is planned as a two-well subsea tieback to the UK sector’s Armada.

A number of major Norwegian offshore projects are also progressing. BP now expects start-up from the Valhall redevelopment in mid-2011. ConocoPhillips is progressing Greater Ekofisk plans. Eni is eyeing first production from the Barents Sea Goliat field in 4Q 2013 and has submitted a PDO for the development of Marulk as a tieback to Norne. The Gjøa semisubmersible was towed to the field in June. GDF Suez takes over as production operator when the field comes on stream in the autumn. Statoil and partners are also mulling a platform for Valemon.

In the Danish sector, Maersk Oil is seeking approval from the Danish Energy Agency to develop further the Valdemar and Tyra fields, including the development of Adda field. It plans to drill three new wells this year from existing slots on the Valdemar platform. On Tyra, it is planning to drill a new long-reach well from an existing slot on the Tyra East B platform.

Offshore Ireland, Providence Resources has contracted Aberdeen-based Unmanned Production Buoy to assess the feasibility of a minimal facilities unmanned buoy to develop the Helvick oilfield, in licence 2/07, in the North Celtic Sea Basin.

On the production side in the UK sector, Maersk finally achieved production from the Affleck oil field in August last year via Janice, following delays because of shut-downs to Janice. Nexen’s Ettrick oil field also started up in August via the Aoka Mizu FPSO. As did Premier’s Shelley oil field via the Sevan Voyageur cylindrical FPSO. Production from Shelley has been disappointing since the start and production is expected to cease at the end of July.

RWE Dea’s Topaz gas field started up in November 2009 as a subsea tieback to Schooner. Maersk’s Lochranza oil field started up in January this year as a subsea tieback to Dumbarton. Centrica’s Ceres (previously Barbarossa) and Eris (previously Channon) gas fields came onstream in March as tiebacks to Mercury. BP achieved first production from the Maule field at the end of June. E.ON Ruhrgas’ Babbage gas field came onstream in August.

Marathon started up production from the Norwegian Volund field in September last year, but only for three days testing. It finally came onstream in May, when capacity became available on the Alvheim FPSO. Statoil’s Morvin field came onstream as a satellite to Asgard B at the beginning of August.

MARVELLOUS MORVIN: First oil from Statoil’s Morvin, a subsea development with two subsea templates and four production wells tied back to the Åsgard B production platform for processing via a 20km long pipeline, started flowing last month. Production will eventually increase to 51,000boe/d. Morvin, which holds estimated recoverable reserves of 70 million boe, was discovered in 2001. Operator Statoil holds a 64% interest in the field with partners Eni (30%) and Total (6%).

In the Dutch sector, Cirrus Energy achieved first production from the M7a gas field in September last year. Wintershall began gas production from P9a&b in October 2009, and GDF Suez flowed first gas from E17a&b in November 2009.

In the Danish sector, startup of DONG’s Nini East was delayed until February, because the host platform on the Siri field was shut-in from for six months until January after a routine inspection revealed cracks in a subsea structure connected to the oil storage tank underneath the platform. A temporary solution involving a metal frame that supports the subsea structure is now in place to ensure its stability. Permanent repair of the damage is expected to be completed in the second half of this year.

On the decommissioning front, BP has submitted a draft decommissioning programme for the Miller field, which came onstream in 1992 and which has produced 345 million barrels of oil during a 15-year lifespan. BP says all the field’s wells have been plugged and abandoned and the proposal is to dismantle the platform in 2012 or 2013. The decommissioning plan proposes removal of the topsides and jacket down to the top of the footings. The Miller pipeline will remain in place for possible future use.

BP has also started consultation on proposals to decommission the Don field, in Northern North Sea block 211/18. Subject to approval, the facilities to be decommissioned include five production wells, two water injection wells, a subsea manifold, a production pipeline and a water injection pipeline.

Bridge Energy UK and MCX Exploration have awarded CSL a turnkey contract to decommission the Tristan NW development in block 49/29b. The work covers subsea intervention and abandonment of two wells, one live and one suspended, and the decommissioning of associated subsea infrastructure.

The UK’s DECC has issued the first licence for the Gateway gas storage project, in the East Irish Sea. Meanwhile, Eni Hewett is seeking approval to develop the depleted Deborah reservoir in the Southern North Sea for gas storage. OE



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