Statfjord Late Life Sanctioned

Statfjord Field, North Sea
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The Statfjord licensees have resolved to implement a late-life development on this North Sea field at a cost of NOK 14.5 billion, plus NOK 1.5 billion in the associated Tampen Link gas pipeline.

These plans will ensure that the Statoil-operated field remains on stream until 2020.

A modified plan for development and operation (PDO) of Statfjord and the plan for installation and operation (PIO) of Tampen Link were submitted to the government on February 25th.

The idea is to convert installations on the field from producing oil with associated gas to recovering gas with associated oil.

That involves changing the drainage strategy to low-pressure production in order to recover the remaining gas in the reservoir.

Additional recoverable volumes associated with Statfjord late life are estimated at 32 billion cubic meters of gas, 25 million barrels of oil and 60 million barrels of condensate.

These quantities alone correspond to a medium-sized discovery on the Norwegian continental shelf.

"With the late life project, Statfjord will reach a recovery factor of close to 70 per cent for oil and 75 per cent for gas," says Řivind Reinertsen, senior vice president for Tampen.

"That's absolutely at the top of the tree for recovery in world terms," he adds, and notes that gas recovery without the project would be only 53 per cent.

This development ensures that Statfjord - which celebrated 25 years on steam in November 2004 - will continue producing until 2018 or later.

It has already yielded four billion barrels of oil and generated over NOK 1,000 billion in revenues during its first quarter-century.

"More than a decade of extra output is also hugely important for those working on and with the field, for the supplies industry, and for the Norwegian community," says Mr. Reinertsen.

The scope of the modification work is put at roughly three million working hours offshore and three million engineering hours on land in addition to some prefabrication.

According to the impact assessment for the project, the employment effect will be about 80,000 work-years in the 2005-26 period.

"This will be demanding, both in scope and investment, and presents the organization with major future challenges," acknowledges Mr. Reinertsen.

"Work on the field will take at least four years, while full production is maintained. That demands great flexibility in the execution phase. In addition comes managing reservoir development with a pressure blowdown."

Plans call for the modification work to begin this autumn, with the blowdown and consequent gas exports scheduled for the autumn of 2007.

Final contracts for platform modifications and drilling facilities are set to be awarded during the spring.

The Tampen Link will tie Statfjord into the existing Flags gas transport system on the UK continental shelf, which runs to St Fergus in Scotland. Pipelaying is planned for the autumn of 2006.

In addition to Statoil, with 44.33 per cent, licensees in the Statfjord Unit are ExxonMobil Norge with 21.36 per cent, Norske ConocoPhillips with 10.32, Norske Shell with 8.54, ConocoPhillips (UK) with 4.84 per cent, BP Petroleum Development with 4.84, Centrica Resource with 4.84 and Enterprise Oil Norge with 0.89.

The partners in Tampen Link are Statoil with 43.9 per cent, ExxonMobil with 18.2, Norske Shell with 12.2, Hydro with 10.5, ConocoPhillips with 8.2 and Petoro with seven.


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