OilVoice - Norway to Further Develop North Sea Fields

Norway to Further Develop North Sea Fields

Monday, February 22, 2010

Oslo has demonstrated its eagerness to exploration work on new generation oil and gas fields in the southern North Sea in an attempt to maintain production in a mature area. Norway's state-owned oil firm Statoil is pushing forward with plans to develop the Gudrun field after receiving the regulatory green light on February 18.

The Norwegian Petroleum Directorate (NPD) felt that Statoil's project, which involves the use of a new fixed platform tied back to existing processing facilities at both Sleipner and Karsto. The field, is located in Production Licence 025. It lies in water depths of up to 110 meters near the Steipner producing area off Stavanger. The Gudrun field has proven reserves of 85.5 million barrels of crude oil. The field is timetabled to come onstream in 2014, although no production estimates have been attached to the time frame.

In preparation for the project, Statoil has budgeted and ring-fenced a total of $3.56 billion for the project. Part of the funding is set to be awarded in the form of an engineering, procurement and construction contract to fellow Norweigan oil field service firm Aker Solutions.

Statoil presently operates the Gudrun project with a 46.8% stake, working alongside the US's Marathon Oil, who holds a 28.2%, and French utility industry giant GDF Suez with a 25% stake.

Owing to its modest size, the Gudrun oil field had been neglected by Statoil until recently. The launch of a major new project in the Sleipner area is a welcome boost for one of Norway's principal oil provinces. Having come online back in the 1990s, the Sleipner fields are on the decline, requiring costly CO2 injection. Once online, it is hoped that Gurdun and another new development, Luva, will offset some of the falling production at the Steipner East and West fields.

Norway's mature North Sea acreage continues to attract significant new investment both from independents and large players seeking greater exposure to low-risk projects. Once the projects are completed, Norway's output stands to be higher than that of any of its North Sea peers.