Statoil submits plan for Snorre expansion project
- Business & Finance
Statoil is on Thursday submitting the plan for development and operation (PDO) of the Snorre expansion project off Norway to the Norwegian authorities.
At the same time, contracts worth up to NOK 9 billion ($1.76B) will be awarded, Statoil said on Thursday. The investment will increase recovery from the Snorre field by close to 200 million barrels.
The development project consists of three development parts: Subsea templates, upgrades on the Snorre A platform, as well as import of gas to improve oil recovery from the field.
“Snorre Expansion has been a marginal project, and Statoil has worked closely with partners and suppliers to realize it. We have finally arrived at a good concept utilizing existing infrastructure and reducing costs,” says Margareth Øvrum, executive vice president for Technology, Projects and Drilling.
“In 2017, we have benefited from a comprehensive improvement effort by Statoil and suppliers, and we have succeeded in realizing development plans for Njord, Bauge, Johan Castberg and now Snorre Expansion, leading to investments of NOK 90 billion on the Norwegian continental shelf (NCS) and important activity for the industry,” says Øvrum.
Statoil pointed out that the Snorre field is important in its effort of increasing long-term value creation and activity on the NCS. The life of Snorre A was originally expected to last until 2011–2014. Now the Snorre field is expected to produce beyond 2040.
“Long-term activity and value creation on the NCS is central in our strategy. Snorre Expansion is the largest improved oil recovery project (IOR) on the NCS, and provides valuable production and activity benefitting the company, partners and society. Investment costs slightly exceed NOK 19 billion, and the PDO involves a comprehensive subsea development, upgrading of the Snorre A installation, increased gas injection and gas import for injection,” says Arne Sigve Nylund, Statoil’s executive vice president for Development and Production Norway.
In addition to the PDO, Statoil is also signing contracts for the subsea production system with TechnipFMC, fabrication and installation of the pipeline bundle system with Subsea 7, modification work on Snorre A with Aibel and a rig with Transocean. All contracts are subject to final approval of the PDO by Norwegian authorities.
“During the past years, Norwegian suppliers have demonstrated both a will and ability to change. Due to enhanced competitiveness, Norwegian industry plays a key role also in the Snorre Expansion project. We estimate that 80 percent of the investments will include companies in Norway. Competitiveness has a short shelf-life however, and it is vital that the improvement work continues with unabated strength,” says Øvrum.
Based on analyses from Agenda Kaupang, around 23,000 man-years will be carried out in Norway in the Snorre Expansion Project phase.
Kickoff in 2021
Snorre Expansion plans to start production in 2021, and will be operated and maintained by the existing Snorre organization in Stavanger, while supplies will still be handled by Fjordbase in Florø.
Partners in the Snorre field are: Statoil (33.27%), Petoro (30%), ExxonMobil Exploration and Production Norway (17.44%), Idemitsu Petroleum Norge (9.6%), DEA Norge (8.57%) and Point Resources (1.1%).
The Snorre field is located in the Tampen area in the northern part of the North Sea. It was discovered in 1979 and production started in 1992.
The new plan entails 24 new wells, 12 for production and 12 for injection and six new subsea templates for production and alternating water/gas injection. The plan also includes pipelines and umbilicals between the subsea templates and Snorre A platform. In addition, the plan involves upgrading of Snorre A for reception of production from the subsea templates and for supplying injection water and gas to the subsea templates.