OKEA to develop gas discovery as first Draugen tie-back

Draugen field operator OKEA and partners Petoro and Neptune Energy Norge have made the decision to develop the Hasselmus gas discovery, located off Norway, as a subsea tie-back to the Draugen platform.

Hasselmus will be the first tie-back to the Draugen production platform and will add in excess of 4,000 barrels of oil equivalents per day to the production, OKEA said on Tuesday.

The Hasselmus project is expected to recover approximately 1.65 GSm3 (10.6 million barrels of oil equivalents) as fuel and export gas and will also make possible the restart of export of associated gas including NGL which is currently being injected into the reservoir

According to OKEA, the development concept is a single subsea well with direct tie-back to the Draugen platform. Production start-up is planned in 4Q 2023 with plateau gas production of more than 4,400 barrels of oil equivalents per day gross.

The breakeven price for the Hasselmus project is estimated to around $28/boe or 85 øre/Sm3.

The expected total investment cost for the project is NOK 2.4 billion ($286.6 million) gross. OKEA’s guiding on capital expenditure for 2021 of NOK 600-700 million remains unchanged following this decision.

OKEA has recently signed a four-year-long frame contract with COSL Drilling Europe for the use of COSL’s drilling rigs at the Norwegian Continental Shelf.

The first well commitment to utilise this agreement was expected to be in conjunction with the expected Final Investment Decision on the Hasselmus project.

“The Hasselmus project is the first field development project for OKEA as the operator. Based on the single-well subsea development solution with tie-back to the Draugen platform it is also a financially robust project”, said Knut Gjertsen, SVP Projects and Technology in OKEA.

“The temporary tax measures adopted by Parliament in June last year, have ensured a timely development of Hasselmus during a period of significant market volatility”.

OKEA’s new CEO, Svein J. Liknes, said: “I am very pleased on my first day as CEO of OKEA to be able to announce that the Draugen licence has committed to developing the Hasselmus gas discovery”.

“The project is important for the long-term development of Draugen and demonstrates our ability to deliver on organic growth opportunities”.

The Hasselmus gas discovery is located on the western edge of the Trøndelag platform in the Norwegian Sea, seven km northwest of the Draugen platform, in production licence 093.

A single well (6407/9-9 T2) was drilled on the Hasselmus structure by A/S Norske Shell in 1999, which encountered a 16 meters gas column and a 6.8 meters oil column in high-quality sands at a depth of 1,700 meters.

OKEA has 44.56 per cent working interest in the Draugen licence and the Hasselmus project. Partners are Petoro (47.88 per cent WI) and Neptune Energy Norge (7.56 per cent WI).