"We feel this decision is excellent news. The NPD has been working for oil production from the Snohvit field for several years. This means that a greater portion of the oil deposits that have been proven in the Barents Sea may be realized," says Bente Nyland, director in the NPD.
The oil resources in Snohvit may represent considerable values for society at large. According to earlier calculations by the NPD, there might be between 50 and 100 million barrels of recoverable oil in the oil zone underneath the Snohvit gas. It is necessary to drill a new appraisal well in order to further define the resource basis.
"Time is of the essence in ensuring that as much as possible of the oil on the Snohvit field will be produced. As the reservoir pressure gradually falls because of gas production, an ever increasing proportion of oil will be lost. And that oil will be lost forever," says Nyland.
She underlines that the oil on the Snohvit field will only be taken out if the production and deliveries of gas can remain unaffected. That is why it is important to plan for it now.
The operator Statoil and the NPD have in parallel been conducting a series of studies to assess the feasibility of producing the Snohvit oil. These studies have been carried out both before and after the Plan for Development and Operation (PDO) of Snohvit LNG, which was approved by the Storting (Norwegian parliament) in 2002.
"New well information, Snohvit LNG starting up later than in the original plans and higher oil prices have put the production of these oil resources back on the agenda," says Nyland.
The oil on the Snohvit field is located outside the areas subject to special requirements in the Management Plans for the Northern Areas (Forvaltningsplanen for nordområdene) (Storting White Paper No. 8, 2005-2006), but the stricter requirement of no discharges to sea during normal operations, applies.
According to Statoil, the appraisal well can be drilled during the first quarter of 2007. A final decision will be made towards the end of 2006.
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