High Exploration Activity on the Norwegian Continental Shelf

At the end of the first half of 2010 (as of 24 June) 2five exploration wells on the Norwegian shelf had been completed. During the same period last year, 33 exploration wells were drilled.

19 of the 2five are wildcat wells (new prospects) and six are appraisal wells (for delineation of earlier discoveries). Nine discoveries were made during the first half of 2010 – five in the North Sea and four in the Norwegian Sea.

Discoveries in the North Sea

Four of the discoveries in the North Sea were made north of the Snorre field in the northern part of the North Sea, while one discovery was made at the Frigg field in the central part of the North Sea.

* In production licence 374 S (awarded in APA 2005), the PetroCanada-operated well 34/4-11 proved oil. The drilling activity was completed on 10 January The discovery is the largest in Jurassic rock in the North Sea in 2010, and the recoverable resources have been estimated at 6-40 million standard cubic metres (Sm3) of oil. The licensees plan to drill an appraisal well late in 2010.

* In production licence 374 S (APA 2005), BG Norge made a minor oil discovery. The well, 34/5-1 S (Blåbær), was completed on 16 March. The discovery was delineated with a negative result with well 35/5-1 A.

* In production licence 057, Statoil made a minor oil discovery with well 34/4-12 S (Omega Nord). The well was completed on 25 January.

* In production licence 057, Statoil made an oil discovery with exploration well 34/4-12 A (Lower Lunde). The recoverable resources are estimated at 1-3 million Sm3 of oil. The well was completed on 19 February.

* In production licence 460 (APA 2006), Det norske made an oil discovery with exploration well 25/1-11, 11 A (Storklakken). The recoverable reserves have been estimated at 1-2 million Sm3 of oil. The well was completed   on 1 May.

Two appraisal wells with positive results were drilled during the first half of 2010. Well 16/1-11, operated by Det norske in the central part of the North Sea, has delineated discovery 16/1-9 (Draupne). Draupne was proven in 2008. The resource estimate has been adjusted upwards to between 13.7 and 18.1 million Sm3 of oil and has given the discovery new impetus as regards development.

The Draupne discovery is near the Luno discovery, operated by Lundin. Luno was delineated by well 16/1-13 (completed on 22 January). The resource estimate after the Luno well is 15 million Sm3 of recoverable oil. The results from the well are encouraging.

Draupne and Luno are located in one of the most exciting exploration areas on the Norwegian shelf in recent years, not far from the Ragnarrock, Ermintrude and Dagny discoveries.

Lundin plans to drill two wells near Luno in the near future. The drilling of 16/2-6 will start in July, and the drilling of 16/1-4 will start in August. Both will be drilled in production licence 338.

Discoveries in the Norwegian Sea

Four discoveries were made in the Norwegian Sea in the first half of 2010, all close to existing infrastructure.

* Statoil discovered oil and gas with exploration well 6608/10-14 S (Fossekall near the Norne field) in production licence 128. The recoverable resources were estimated at 1-3 billion Sm3 of gas and 6-10 million Sm3 of oil. The well was completed on 1 April.

* In production licence 433, Centrica found hydrocarbons with exploration well 6506/9-2 (Fogelberg, north in the Åsgard area). The recoverable reserves have been estimated at 3-15 million Sm3 of oil equivalents (o.e.). The well was completed on 28 April.

* In production licence 473, Statoil made a discovery with exploration well 6407/26 (near the Mikkel field, in Jurassic rock). The recoverable resources have been estimated at 2-4 million Sm3 o.e. The well was completed on 14 May.

* In production licence 212, BP Norge proved hydrocarbons with exploration well 6507/5-6 S (the Lysing formation near the Skarv field). The size of the discovery was estimated at 1.6-3 million Sm3 of condensate and 8-14 billion Sm3 of gas. The well was completed on 10 June. The discovery represents interesting additional resources in Skarv, which is under development.

Ongoing drilling activity

At the end of the first half of 2010, seven exploration wells were being drilled – four in the North Sea and three in the Norwegian Sea.

In deep water (1354 metres) in production licence 326 in the Norwegian Sea, Shell is drilling appraisal well 6604/10-1 on the Gro discovery, proven in 2009. It is expected that the well will reach the reservoir in July.

The Dalsnuten prospect (production licence 392) will be drilled after the Gro well. Dalsnuten is also operated by Shell, and the prospect lies in the same area in deep water. The drilling facility Aker Barents is used on both Gro and Dalsnuten.

In addition, two wildcat wells are being drilled in the Åsgard area by Wintershall and RWE Dea Norge, respectively.

Four exploration wells are being drilled in the North Sea. Wildcat well 15/3-9 (Brynhild in production licence 187, close to the Gudrun field) is operated by Statoil. The well, which has exploration targets in Jurassic rock, will soon reach the reservoir.

Further south, Talisman is drilling appraisal well 15/12-23 A in production licence 038 D. The well is being drilled in the Grevling discovery, proven in 2009.

ConocoPhillips is drilling wildcat well 8/10-3 just north of the Ekofisk area. The well is being drilled in the Megeladon prospect at a depth of 5340 metres. The well, which is scheduled for completion in December, is important for the further exploration of the deep exploration targets in the southern North Sea.

West of Ula, BG Norge is in the process of completing well 1/3-12 S in the Mandarin prospect. This is the deepest well ever drilled on the Norwegian shelf (more than 5900 m deep).

The Barents Sea

There has been no exploration activity in the Barents Sea so far in 2010. The drilling facility Polar Pioneer will start a drilling campaign in the north in October. The first well will be drilled in the Skrugard prospect, west of Lopphøgda, in production licence 532. The well is operated by Statoil. This was a popular area in the 20th Licensing Round.

Eni will then drill two exploration wells – one in the Alke area (production licence 489, awarded in APA 2008), and one in production licence 533 west of Lopphøgda, awarded in the 20th Licensing Round.

The NPD’s forecast of 40 to 50 exploration wells spudded in 2010 seems to hold true, although the drilling programs so far are not coming in at the same pace as last year. One cause of this is Statoil’s reduction in exploration activity compared with 2009.

Plans for development and operation – 2010

Four plans for development and operation (PDO) have been submitted in the first half of 2010 for the Norwegian shelf. The Norwegian Petroleum Directorate expects that two or three PDOs will be submitted in the second half of the year. This is approximately in line with the NPD’s estimates at the beginning of the year.

* The operating company Statoil has submitted a PDO for 15/3-1 S Gudrun and 15/3-4 Sigrun. The licensees plan to develop Gudrun with a platform connected to Sleipner. According to the plan, Sigrun will be a subsea development connected to Gudrun.

* The operating company BG has submitted a PDO for 15/12-19 Pi Sør and 6/3-1 Pi Nord (now Gaupe). The licensees want a subsea development connected to Armada on the UK continental shelf.

* The operating company Eni has submitted a PDO for 6507/7-2 Marulk. The licensees plan a subsea satellite connected to Norne.

* The operating company ConocoPhillips has submitted a PDO for a new living quarters platform on Ekofisk.

* The operating company Statoil will possibly submit a PDO for 34/10-23 Valemon in the autumn. The licensees want a platform solution where the gas is sent to Heimdal and the liquids sent to Mongstad via Kvitebjørn. The resource base for Valemon is uncertain.

* The operating company Det norske will possibly submit a PDO for Frøy in the autumn. This will be a new development of a shut-down field, and the licensees are considering several types of field centres (leasing). A PDO was submitted in 2008, but the project was postponed due to the international financial crisis.

* At the end of last year, it was expected that the operating company Maersk Oil would submit a PDO for 1/5-2 Flyndre in 2010, but this is now unlikely. Flyndre is a small border discovery straddling the Norwegian and UK sectors.

* It seems that the operating company BG may deliver a PDO for the oil discoveries Bream and Jordbær at the end of 2010. At the end of last year, the PDO was expected in 2011. The licensees will probably go for a development with two leased field centres.

* The operating company Lundin may submit a PDO for the Nemo discovery in the North Sea. The licensees plan a subsea development connected to the Pierce field on the UK continental shelf.

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Source: NorwegianPetroleumDirectorate, July 26, 2010: