Statoil to Build New Platform on Snorre Field
- Business & Finance
Together with Petoro and the other licence partners, Statoil has worked hard to find a good solution for extending the life of the field to 2040.
A thorough evaluation of the “Snorre 2040” project has been carried out with detailed examination of two development concepts—a subsea development with continued use of the Snorre A and B platforms, or a development with a new platform tied in to Snorre A and B.
“The platform solution is the best alternative for maximising production and creating the greatest possible value,” says Øystein Michelsen, Statoil executive vice president for the Norwegian shelf.
“Snorre 2040 is an important improved oil recovery (IOR) project and supports our ambition of achieving an average oil recovery rate of 60% from our fields on the Norwegian shelf.”
Statoil is a world leader within IOR, with an average oil recovery rate of 50% from the Norwegian shelf.
Snorre field reserves are currently estimated at 1.55 billion barrels of oil. The original estimate when the plan for development and operation (PDO) was submitted in 1989 was about 760 million barrels of oil. Thanks to a number of IOR measures and use of new technology, recoverable reserves have more than doubled.
An important contribution to the increase in recoverable reserves came with the decision to install a second platform, Snorre B, on the northern part of the field, and to start reinjection of produced gas from the mid-1990s.
When the PDO was submitted, the estimated recovery rate was 25%. Today the estimated recovery rate is 47%, but Snorre has an ambition of implementing additional IOR measures that will enable the field to increase the recovery rate to 55%.
Øystein Michelsen emphasises that more time will be needed to mature the development solution and make the decision basis more robust.
“Snorre 2040 is a huge project with significant investments, but it will also yield substantial value. Thorough preliminary work is important to arrive at the best possible solution. We are also seeing marked rising costs in our industry and we must ensure that value creation is optimal,” says Michelsen.
“The change in the petroleum tax rules that was adopted in May also undermines the financial conditions of Snorre 2040, which means that we have to spend more time on maturing the project,” says the executive vice president.
The final development concept decision is scheduled for the first quarter of 2015.
A new drilling and processing platform will also facilitate tie-in of new discoveries in the area. These are resources that might otherwise have ended up being not profitable to recover.
The partners in the Snorre licence are Statoil (33.27556%), Petoro (30.0%), ExxonMobil E&P Norway (17.44596%), Idemitsu Petroleum Norge (9.6%), RWE Dea Norge (8.57108%) and Core Energy (1.1074%).
Press Release, October 28, 2013