Wintershall to Expand Position in the North Sea

Wholly-owned BASF subsidiary Wintershall is set to expand its oil and gas exploration and production activities in the North Sea. To do so, the largest German-based oil and gas producer intends to invest more than 300 million euros by 2010. "Even if the European Union is increasingly dependent on imports of natural gas from Russia and North Africa, there is still potential in the North Sea", Dr. Ties Tiessen, Member of the Wintershall Board of Executive Directors responsible for Production, explained at the unveiling of a new platform control center in Den Helder in the North of the Netherlands. "There are many small and medium-sized natural gas fields all over the North Sea that can be developed". About half of the natural gas consumed today in Europe still comes from the countries bordering on the North Sea – Norway, the Netherlands, Denmark and the UK. "Russia remains Europe’s most important partner when it comes to securing the future energy supply in Europe but the European Union should take steps independently to boost the energy supply and make a clear commitment to domestic oil and gas production", Dr Tiessen said.

Since 2000 Wintershall has increased natural gas production in the Netherlands, where it is one the largest gas producers, fivefold to two billion cubic meters. Wintershall has been operating in the North Sea since 1965 and today operates a total of 26 platforms, 25 of them in Dutch territorial waters and one in German territorial waters. The Wintershall platform in the outermost area of the German North Sea – the so-called "Entenschnabel" (Duck’s Bill) – the A6-A, is Germany’s only offshore gas production platform.

Overall, Wintershall has an annual production volume of six billion cubic meters with its partners in the Netherlands, which makes it one of the biggest operating companies in the country. "We are endeavoring to enhance our strong position in the southern North Sea", the Member of Wintershall Board of Executive Directors responsible for Production announced. In order to reach this goal, Wintershall, one of the few companies active in the local industry, has maintained two drilling platforms under contract, which are continuously sinking new exploration and production wells.

221 million euros invested in the North Sea in 2006 alone

The wholly-owned BASF subsidiary has been expanding its activities in the Netherlands to the British, Danish and Norwegian sectors of the North Sea for some time. Since the summer of 2006 Wintershall has already acquired exploration rights for a total of 33 blocks and part blocks – 14 in Germany, 8 in the UK, 6 in Norway, 3 in Denmark and 2 in the Netherlands – which are being searched for new oil and gas deposits. Overall, Wintershall now has 86 blocks in the North Sea. "After years of strong growth in North Sea production, we are now looking to secure the company’s further development with new oil and gas fields", explained Dr. Tiessen, Member of the Wintershall Board of Executive Directors. Wintershall already spent 524 million euros last year on the search and development of new oil and gas deposits. 221 million of this was spent on the Europe/North Sea core region alone. Additional investments were made in other regions: North Africa (138 million euros), Russia and the Caspian Sea (102 million euros) and in South America (62 million euros).

The acquisition of German, Norwegian, British and Dutch rights and concessions corresponds with Wintershall’s long-standing "Gas for Europe" strategy due to their proximity to the natural gas market in Europe. These activities are largely managed by the subsidiary Wintershall Noordzee B.V., based in Rijswijk (near The Hague), which is also home to the corporate-wide competence center for offshore technology. The continued development of offshore expertise is gaining importance in the exploration and production of oil and gas generally and is also used in operations in other regions of the world.

Radio monitoring of gas production platforms

In order to be able to exploit the many small and medium-sized deposits just off the coast of the Netherlands in a commercially viable way, Wintershall has set itself the goal of increasing the efficiency of its operations in the southern North Sea. The new center for Remote Controlled Operations (RCO) is an important part of this plan: with the ultra-modern radio monitoring system, from now on the company will monitor 18 offshore platforms from the mainland. As Dr. Tiessen explained, "The remote controlled operations from the mainland make it possible to produce with greater economic efficiency, which, of course, also allows us to develop smaller reserves commercially". The investment costs for the control center total 11.5 million euros, 4.3 million euros of which Wintershall, as the operating company, is covering.

The commissioning of the L5-C natural gas field is a good example of a project in which Wintershall has once again managed to reconcile ecological and economic needs. Production, which started in November 2006, takes place from a reconstructed production platform, which was formerly in use for many years as platform K10-V, and which was completely modernized. In just seven months this facility was dismantled, refurbished, reconstructed and taken to its new production location. As Dr. Tiessen explained, "The reconstruction and refurbishment of the old platform saved time and money that would otherwise have been necessary to construct a fully new platform since a large proportion of the materials could be reused". The L5-C platform will also be controlled via the RCO system.

Dr. Tiessen announced that Wintershall would continue to invest more in brand new technologies in order to extend the production time of existing older fields in the North Sea and to make it commercially possible to develop deposits that are difficult to exploit. "However, for this we general basic conditions in Europe that guarantee companies a reliable basis for calculating and planning their investments in the long term".

Cross-border seismic surveys

The development of the E18-A and P9-A fields in the southern Dutch sector of the North Sea is currently being prepared. A 3-D seismic survey off the Dutch coast is planned for the last quarter of this year. In the neighboring section of the German North Sea, in June of this year the BASF subsidiary received a three-year exploration license for three blocks, H10, H13 and H14 and for two part blocks, G12a and G15a. The blocks are situated 80 kilometers northwest of the East Frisian island of Borkum. Wintershall already has seismic data for the approx. 1,500 square kilometer area and in recent months the company collected new survey data in one of the biggest cross-border seismic initiatives in the company’s history: within four months an area of about 2,300 square kilometers in the Dutch, Danish and German North Sea was searched for new gas deposits.

A first well is already being sunk in Ockley, a neighboring field in the British sector of the North Sea. Geologists at the participating companies expect a potential of up to five billion cubic meters of gas and five million barrels of condensate from this field. Wintershall is participating in this project in the North Sea blocks 30/1d and 30/1h with an overall share of 22.7 percent and is working together with other firms including Danish company Maersk Oil and Gas, which is also the operating company. "With the Ockley field we are continuing to expand our position in the British North Sea", Dr. Ties Tiessen, Member of the Wintershall Executive Board of Directors, explained.

Even before this project the BASF subsidiary had already extended its exploration activities in the southern part of the British North Sea. With the four part blocks 49/29c, 49/24b, 49/25b and 50/21, as future operating company, Wintershall acquired a new exploration license in the 24th licensing round of the United Kingdom. It also received a license for the southern part of block 44/13. In another part block (44/24b), Wintershall Noordzee B.V. has the majority shareholding at 49.5 percent. The first production well is planned for this year once the seismic surveys have been completed. The blocks concerned are situated close to areas on the Dutch side, which have previously been geologically investigated by Wintershall; some of these are already producing as well. The necessary infrastructure is also largely already in place.

Wintershall takes over as operating company in Norway

In 2005 the subsidiary Wintershall Norge A.S., based in Oslo, was set up for the work off the coast of Norway. With the majority shareholding of 40 percent of block 33/12, this year, for the first time, Wintershall is operator in Norway. Maersk Oil and Gas is another consortium partner in this block with 35 percent. In addition, the BASF subsidiary received 20 percent shares in three other blocks, 34/8, 34/9 and 34/11, from the Norwegian government. In 2004 the Norwegian energy ministry had given Wintershall the go-ahead to work as operator and license holder in Norway. Norway is the fourth-largest natural gas producer in the world and one of the most important supplier countries in the European Union. With shares in six concessions in nine blocks overall, Wintershall has now positioned itself as an active player in the E&P sector in Norway.