Statoil has announced a £40Bn project to install a third tension leg drilling and processing platform in the North Sea Snorre Field to extend its working life and extract an additional 300 million barrels of oil.
The news comes as a significant boost to the industry as Statoil had previously said that rising costs across the oil sector and Norwegian government tax increases placed the project in jeopardy. Statoil says however that the investment will increase the field’s recoverable reserves to 55%, compared to 25% when the field started production in the early 1990’s and a typical industry recovery rate of up to 35%. Snorre reserves are currently estimated at 1.55Bn barrels.
The final development concept decision will be taken in early 2015 and the new platform should start production in 2021. Statoil executive vice president for the Norwegian shelf Oystein Michelsen said the changes in petroleum tax rules undermined the financial case for the development ‘which means we have to spend more time maturing the project’.
Statoil and its partners in the Snorre field - Petoro, ExxonMobil, Idemitsu Petroleum, RWE and Core Energy – had also considered a subsea development that would be tied into the two existing platforms as an alternative way of increasing drilling capacity. The new platform will be tied into the two existing platforms, sending oil to one of those and then to the market.
The new platform will be able to drill to 7,000 metres. It will have 140 single cabins and will drill 40 new wells for production and injection of water and gas. The new platform also facilitates the tie on of new discoveries in the Snorre field and the adjacent Tampen area, which Staoil says may not otherwise have been profitable to recover. The project will also involve importing gas
Part of the project involves construction of a new pipeline from Gulfaks or Visund to import gas that will be injected into the reservoir from all platforms on the Snorre field to enhance recovery. This gas could be transported to land for sale at the end of the field lifetime.
Photo credit: Statoil