Summary – first six months of 2017
13/07/2017 The activity level on the Norwegian shelf is high. During the first six months of the year, six discoveries were made, six development plans have been approved and three new fields have started producing.
Petroleum production
Total petroleum production so far in 2017 is about 119.9 million standard cubic metres of oil equivalents (Sm3 o.e.). Of this, 47.5 million Sm3 are oil and 11.4 million Sm3 are NGL and condensate. 61 billion Sm3 of gas have been sold. The total volume is 1.4 million Sm3 o.e. higher than in 2016.
Exploration
During the first half of the year, 15 exploration wells were drilled; nine wildcat wells and six appraisal wells. Six discoveries were made; two in the North Sea, two in the Norwegian Sea and two in the Barents Sea.
In the North Sea, gas was discovered in Statoil’s wildcat well 34/11-6 S near the Valemon field. The preliminary estimate for the discovery is between 3 and 8 million Sm3 of recoverable o.e.
Oil and gas were proven in Statoil’s wildcat well 34/10-55 S northeast of the Gullfaks field in the North Sea. Preliminary resource estimates are between 1 and 3 million Sm3 of recoverable o.e.
Two appraisal wells have also been drilled in the North Sea; Statoil’s well 16/2-22 S delineated the Johan Sverdrup field. The well encountered a 15-metre oil column in a moderate to poor reservoir. The original resource estimate of 302-477 million Sm3 of recoverable o.e. is unchanged.
Lundin’s well 16/1-27 delineated the Edvard Grieg field. The well encountered a 15-metre oil column in a very good reservoir. The resource estimate, which was 35 million Sm3 of recoverable o.e. before this well was drilled, will be increased by between 1.6 and 4.8 million Sm3.
In the Norwegian Sea, Statoil proved oil and gas northwest of the Norne field in wildcat well 6608/10-17 S. The preliminary estimate for the discovery is between 3 and 13 million Sm3 of recoverable o.e.
A gas discovery was made in wildcat well 6507/3-12, which Statoil drilled east of the Alve field. The preliminary estimate is between 1 and 5 million Sm3 of recoverable o.e. The drilling of appraisal well 6507/3-12 A was stopped due to technical difficulties.
In the Barents Sea, Lundin discovered oil and gas in wildcat well 7219/12-1 and appraisal well 7219/12-1 A northwest of the Alta discovery. The preliminary volume estimate is between 5.5 and 16 million Sm3 of recoverable o.e.
Statoil made an oil discovery in wildcat well 7219/9-2 about 23 kilometres southwest of discovery well 7220/8-1, Johan Castberg. Preliminary calculations show that the discovery contains between 4 and 8 million Sm3 of recoverable oil.
One appraisal well was drilled in the Barents Sea this year. Lundin’s well 7120/1-5 on the Gohta discovery encountered a poor reservoir with traces of hydrocarbons and is classified as dry. The original resource estimate of 10-21 million Sm3 of recoverable oil and 5-8 million Sm3 of recoverable gas will be reduced as a result of this.
Planned exploration wells in the second half of the year
Between 20 and 25 exploration wells are planned in the second half of 2017. There could be between eight and ten wells in both the Barents Sea and North Sea, while there could be as many as five in the Norwegian Sea. Of these, three are ongoing, 7121/8-1 and 7220/11-4 in the Barents Sea and 31/7-2 S in the North Sea.
Mapping of the eastern parts of the Barents Sea north
In April, the NPD presented the results from a mapping of the Norwegian part of the eastern Barents Sea north. The area constitutes about 171,000 km2, and is not open for petroleum activity. The resources in the area are estimated at 1.4 billion Sm3 of oil equivalents. About 60 per cent of the resources are most likely liquid, and the rest is gas.
- Doubling the resource estimate for the Barents Sea >>
- Geological assessment of petroleum resources in eastern parts of Barents Sea north 2017 >>
Awards in predefined areas (APA) 2016 and 2017
In mid-January, the Ministry of Petroleum and Energy (MPE) awarded 56 new production licences to 29 companies in APA 2016. Thirty-three companies applied. Thirty-six production licences were awarded in the North Sea, 17 in the Norwegian Sea and three in the Barents Sea.
APA 2017 was announced on 2 May with an application deadline of 1 September. As from this year, applications shall be submitted to the NPD digitally.
24th licensing round
On 21 June, 102 blocks were announced in the 24th licensing round. Ninety-three of the blocks are located in the Barents Sea and nine in the Norwegian Sea. The application deadline is Thursday, 30 November.
Field developments
New fields
In the first half of 2017, the three fields Flyndre, Sindre and Gina Krog started producing.
Flyndre is an oil field in the Ekofisk area in the North Sea, on the border between the UK and the Norwegian shelf. It was proven in 1974 and is developed with a subsea well tied in to the Clyde facility on the UK shelf. The majority of the resources are located in the UK sector. Production started in March 2017. Maersk Oil UK is the operator.
Sindre is a small oil field located just to the east of Gimle and northeast of Gullfaks in the northern part of the North Sea. The field was proven by drilling a long well from the Gullfaks C platform in April 2017, and production started through this well in May, after a PDO exemption was granted. Statoil is the operator.
Gina Krog is an oil and gas field near the Utsira High in the North Sea, and was proven in 1974. The recoverable reserves are 16.8 million standard cubic metres of oil, 11.8 billion Sm3 of gas and 3.2 million tonnes of NGL. The field was developed with a steel platform and an oil storage ship. A jack-up rig is being used for drilling. The oil is exported via buoy loaders, and the gas is sent to the Sleipner A platform for final processing. Gas for injection is imported from Zeepipe 2A (Gassled). Production started on 30 June. Statoil is the operator.
Plans for development and operation
Six plans for development and operation (PDOs) have been approved this year, for the fields Utgard, Byrding, Oda, Dvalin, Trestakk and Bauge. An amended PDO for Njord was also approved. The fields Goliat Snadd, Troll Brent B and Sindre have been granted PDO exemptions. Twelve field developments are ongoing, and two cessation plans were received during the first half of the year.
Utgard is a gas and condensate field west of the Sleipner area in the North Sea. It extends across the Norwegian-UK continental shelf border and is estimated to contain about nine million Sm3 o.e. Most of the reserves in Utgard are located on the Norwegian side. The development will be tied in to facilities on Sleipner. The expected investment is nearly NOK 1.9 billion (Norwegian share). Production start-up is scheduled for the 4th quarter of 2019. Statoil is the operator.
Byrding is an oil and gas field located southwest of Gjøa in the North Sea. It is estimated to contain about 1.8 million Sm3 o.e. and will be developed using an existing subsea template in the Fram area. The expected investment is nearly NOK 1 billion. Statoil is the operator.
Oda is an oil field located east of Ula in the North Sea. Estimates show that 7.5 million Sm3 of oil equivalents can be recovered here. Investments for the development are estimated at about NOK 5.4 billion. The field will be tied in to Ula, and production is scheduled to start in the third quarter of 2019. Centrica is the operator.
Dvalin is a gas field located near Heidrun in the Norwegian Sea. The recoverable resources are estimated at about 18 billion Sm3 of gas. The field will be tied in to Heidrun. Investments are expected to be in excess of NOK 10 billion. Production start-up is scheduled for the fourth quarter of 2020. DEA is the operator.
Trestakk is an oil field located near Åsgard in the Norwegian Sea. Recoverable resources are calculated at 10.5 million Sm3 of oil. The field will be tied in to the Åsgard A ship. Expected investments are approx. NOK 5.5 billion. Production start-up is scheduled for the second quarter of 2019. Statoil is the operator.
Bauge is an oil field near the Njord field and the Hyme subsea field in the Norwegian Sea. Bauge will be tied in to both these fields. The recoverable resources are estimated at 7.9 million Sm3 of oil, 1 million tonnes of NGL and 1.9 billion Sm3 of gas. Investments are estimated at NOK 3.9 billion. Production start-up is scheduled for the fourth quarter of 2020. Statoil is the operator.
Njord in the Norwegian Sea was shut down in 2016 due to structural problems with Njord A. Njord A and Njord B were towed to land for upgrades that will enable them to produce for several more years. Remaining recoverable resources are calculated at 5.1 million Sm3 of oil, 13.2 billion Sm3 of gas and 4.1 million tonnes of NGL. Investments are estimated at about NOK 15 billion. Production start-up is scheduled for the fourth quarter of 2020. Statoil is the operator.
Expected development plans
The Yme field in the North Sea was in production from 1996 to 2001. It was then shut down, and the facilities were removed. A new PDO for Yme was approved in 2007. The field was developed with a jack-up production facility (MOPU). Due to structural deficiencies, this facility could not be used, and it was removed in 2016 without starting production on the field. The licensees, with Repsol as the operator, are planning to submit a revised PDO in the autumn of 2017. The plan is to use a jack-up facility equipped with drilling and process systems to produce the remaining resources in Yme.
Snorre Expansion in the North Sea is the largest project for improved oil recovery on the Norwegian shelf. Snorre is one of the fields on the shelf with the greatest remaining oil volumes. The project entails an extensive subsea development with six new subsea templates tied in to the Snorre A platform. It also involves upgrading the Snorre A facility and increased gas injection. This could yield nearly 30 million Sm3 more oil. Investments are estimated at NOK 24 billion. The plan is to submit a PDO for the project in December. The lifetime of the field will extend beyond 2040. Statoil is the operator.
Snadd is a 60-kilometre-long gas discovery west of the Skarv field in the Norwegian Sea. It is located in Skarv Unit, where Aker BP is the operator. The PDO is expected at the end of the fourth quarter. The plan is to develop Snadd in two phases due to the gas processing capacity on the Skarv production vessel. Phase 1 (south) is scheduled to start production in 2020 and Phase 2 (north) in 2023. Phase 2 also includes Snadd Outer in PL212E, which has the same owners. Recoverable gas reserves total 25 billion Sm3, and the investment costs are estimated at NOK 10.8 billion.
Pil/Bue are two oil and gas discoveries in the Norwegian Sea. Recoverable oil reserves comprise about 15 million Sm3 of oil and 3.7 billion standard cubic metres of gas. The investment estimates are NOK 11.4 billion. The PDO is expected in December. Planned production start-up is in 2020. VNG Norge is the operator for the development.
Johan Castberg in the Barents Sea was proven in 2011. The operator, Statoil, plans to submit the PDO in the last quarter of 2017, and production is scheduled to start in 2022. The discovery will be developed on the seabed with ten subsea templates and two satellites tied in to a floating production vessel (FPSO). The first production phase is expected to yield 88 million Sm3 of oil, and it is possible to considerably increase recovery by drilling more wells. The field will be operated from Harstad and will have bases for operation and helicopter transport in Hammerfest. Field lifetime is expected to extend beyond 2050, and investments are calculated at about NOK 49 billion.
Ongoing developments
Twelve field developments are currently ongoing on the Norwegian shelf. They are Johan Sverdrup, Martin Linge, Maria, Aasta Hansteen, Troll Brent B and Hanz. This is in addition to Byrding, Bauge, Dvalin, Oda, Trestakk and Utgard.
Cessation and field shutdowns
No fields were shut down during the first half of 2017. However, the NPD has received plans to shut down the fields Trym and Gyda.
The gas and condensate field Trym is located in the southern part of the Norwegian sector in the North Sea, three kilometres from the border with the Danish sector. Production here could stop in October 2018 if the Danish Tyra field is shut down due to subsidence of the seabed.
Gyda is an oil field in the southern part of the Norwegian sector in the North Sea, between Ula and Ekofisk. The disposal decision was made in June, and production is scheduled to stop in 2018.
A disposal decision has been made for the old living quarters platform on Valhall in the North Sea.
Other news
The 2017 resource report
The NPD launched its resource report “Values for the future” in June. This showed that total resources on the shelf, including the estimate for undiscovered resources, has increased by more than 40 per cent since 1990. Nearly 850 million Sm3 o.e. can be produced through improved recovery measures, as much as the total production from the Statfjord field since its start-up in 1979. Through use of sophisticated enhanced recovery methods (EOR), another 320 – 860 million Sm3 of oil and gas can potentially be recovered. There are also significant volumes of oil and gas in tight reservoirs that can be recovered by using new technology.
- Resource Report 2017 >>
(In Norwegian only, english version will be published later this year) - Positive prospects for producing more >>
Player landscape
There are 26 operators and 47 licensees in production licences on the shelf. During the first six months, one company – Pandion Energy – has been pre-qualified as a licensee, and another – Okea – as an operator.
Mineral deposits on the seabed
The NPD was assigned new tasks when the MPE took over administrative responsibility for surveys and recovery of mineral deposits on the continental shelf, pursuant to the cabinet resolution on 31 March:
- Preparing an overview of existing, relevant mineral data that is available in various institutions and compiling all this data at the NPD
- Continuing mapping and analyses of sulphide deposits related to spreading ridges in the Norwegian Sea
- Continuing the mapping of iron manganese crusts in the deep sea areas
- Preparing a draft plan for further mapping of the most commercially interesting mineral deposits on the Norwegian shelf
The NPD has extensive experience with organising and collecting geological and geophysical data at sea. The NPD manages Norway’s central storage for all geological samples collected on the Norwegian shelf, and facilitates access to this information for the industry.
The NPD cooperates with the University of Bergen on mapping seabed minerals.
Management plans
The Government revises the management plans for the sea areas every twelve years as a minimum, and completes updates every four years. Work is ongoing to update two management plans, and the NPD is contributing to both.
The work on the management plan for the Norwegian Sea started in 2007. The technical basis was published in 2015, and the Report to the Storting was processed in the Storting in June 2017. The management plan for the Barents Sea and sea areas off Lofoten was presented in 2005, and will be revised in 2020.
- Havforum >> (In Norwegian only)
New regulations submitted for consultation
Proposals for two new regulations were submitted for public consultation at the end of June.
- Høring av forslag til forskrifter >> (In Norwegian only)
These are the Resource Management Regulations and Regulations relating to material and documentation when utilising subsea reservoirs on the continental shelf to store CO2 (Regulations relating to documentation for storage of CO2).
The MPE also submitted a proposal for amendment of the Regulations relating to storage and transport of CO2 on the shelf.
The deadline for comments for all of these is 2 October 2017.
New guidelines
The NPD has revised the guidelines for Section 30a of the Petroleum Regulations relating to consent for commencement and continuation of facilities on the shelf. The purpose is to simplify and clarify use of the consent provision.
Updated: 13/07/2017