Economic climate slows European offshore industry, Med picking up

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By Justin Smith

ABERDEEN — As is the case in other offshore markets, the Northwest Europe and Mediterranean offshore oil and gas industry is feeling the effects of a slumping world economy. The price of oil has been on a roller coaster ride, taking rig demand and interest in licensing rounds with it.

However, field development work continues at a relatively steady pace, while the eastern Mediterranean Sea is emerging as a more active hydrocarbon region.

Rig demand in the region has taken a dive and is not expected to improve over the rest of the year, according to ODS-Petrodata’s World Rig Forecast – Short Term Trends. The demand for jackups in both areas will lag behind supply, creating a further surplus of rigs in the world. The semisubmersible market is also forecast to be over-supplied in the near-term.

Discoveries

There have been 15 discoveries so far this year in Northwest Europe and the Mediterranean Sea. At this point in 2008, 18 discoveries had been made, with a total of 44 made during the year, which was the highest total seen in the last few years.

Repsol has discovered oil with the A1-NC202 new field wildcat well in the Sirte Basin off the coast of Libya. The well is located just over nine miles (15 km) west of the coast and 25 miles (40 km) southwest of Benghazi City, Libya. The well was drilled to a total depth of approximately 15,815 feet (4,820 m) in a water depth of about 164 feet (50 m) using Premium Drilling jackup COSLForce.

The initial production testing established a flow of 1,264 b/d of 26-degree API oil and 580,000 cf/d of natural gas through a half-inch choke. The Dernah formation was tested at an interval between 4,484 feet (1,367 m) and 4,442 feet (1,354 m) total depth.

Noble Energy has made a natural gas discovery at the Tamar prospect in the Matan license offshore Israel. The Tamar No. 1 well, in water depths of around 5,500 feet (1,676 m), was drilled to a total depth of 16,076 feet (4,899 m) to test a subsalt lower-Miocene structure in the Levantine basin.

Formation logs identified more than 460 feet (140 m) of net pay in three high-quality reservoirs. The thickness and quality of the reservoirs encountered were greater than anticipated, and could be over 3 Tcf.

Oil and gas have been encountered by StatoilHydro in the Katla prospect, which lies 6.8 miles (11 km) southwest of the operator’s Oseberg South platform in the Norwegian sector of the North Sea.

Proven recoverable volumes are 50 to 80 million BOE, with the bulk of the resources occupying the Tarbert formation in the upper Brent group. Oil and gas were found in the structure, while gas was also proven in Upper Jurassic reservoir rocks belonging to the Heather formation.

The find will probably be developed and produced through a tie-in to one of the existing subsea installations in the area.

Licensing Rounds

Norway’s Ministry of Petroleum and Energy has awarded nine production licenses in the Barents Sea and 12 new production licenses in the Norwegian Sea as part of the 20th licensing round.

Thirty-four companies have been offered participating interests in production licenses, and 15 companies are offered operatorships in the 20th licensing round. One company, North Energy AS, has been offered its first operatorship on the Norwegian continental shelf.

The Icelandic National Energy Authority (NEA) received an application from Aker Exploration and one from Sagex Exploration and Lindir Exploration in its first licensing round for the northern Dreki area.

Taken together, the applications are for Blocks IS6708/1, IS6708/2, IS6808/11 and IS6909/11, complete or partial.

The applications will be evaluated according to the criteria published in the documents for the Licensing Round and the decision on the issuing of licenses is planned to be finalized by the end of October 2009.

Field development

Aker Solutions subsidiary Aker Subsea AS has been awarded an engineering, procurement and construction contract by DONG E&P Norge, operator of the Oselvar field, to deliver a complete subsea production system to the North Sea field development. Contract value is approximately NOK 350 million (US$55.5 million).

The scope of work in the contract includes engineering, procurement and construction of a four-slot template with manifold, three subsea trees, control systems, subsea wellheads and 17 miles (28 km) of steel tube umbilicals.

Meanwhile, ConocoPhillips Skandinavia AS has awarded Paris-based Technip a lump sum contract for the Ekofisk VA subsea water injection project in block 2/4 on the Norwegian Continental Shelf.

The contract provides for the installation, tie-in and commissioning of subsea facilities between the existing Ekofisk facilities as well as a new eight-well subsea injection template (2/4VA).

The contract includes installation engineering; procurement of installation equipment; installation of client provided spools; flexible flowlines and umbilicals; design, fabrication and installation of protection covers; and tie-in and commissioning.

Installation will be performed by a number of vessels, including Technip’s newbuild diving support vessel, Skandi Arctic.

www.energycurrent.com

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