StatoilHydro Spotlights Drilling on Peon Shallow Gas Discovery

An appraisal well has been completed by StatoilHydro on the shallow Peon gas discovery in the North Sea, which was made in 2005 by Norsk Hydro Produksjon AS in Pleistocene reservoir rocks (the Naust formation in the Quaternary). The discovery is located 90 km west of Floro and 60 km northwest of the Gjoa field in the northern part of the North Sea.

Part of the Naust formation, this shallow deposit contains estimated recoverable resources of 15-30 billion standard cubic meters. The main goal of the appraisal well was to test the productivity of the discovery and to qualify the well concept for a possible development.

"We're the first company to look at opportunities for commercial utilization of shallow gas," explained Finn Langgard, project manager for Peon. "In connection with this discovery, we're developing new technology which will allow us to utilize gas resources of this kind.

"We've taken an important step forward with the present well in qualifying the solutions which will make it possible to recover Peon gas."

The appraisal well, 35/2-2, was drilled from the Transocean Winner semisubmersible rig to a vertical depth of 640 meters in 372 meters of water. The well demonstrated that it is possible to drill and produce gas in what constitutes a record shallow reservoir on the Norwegian continental shelf.

The reservoir is situated just 581 m below the sea surface and 209 m under the seabed. A successful formation test was performed. The maximum production rate was 1.03 million Sm3 gas per flow day through a 104/64-inch nozzle opening. This probably represents the start of exploration with a view towards developing shallow gas on the Norwegian shelf. The well will now be plugged and abandoned.

The licensees in production license 318 are StatoilHydro, the operator with 60%, Petoro with 20% and Idemitsu Petroleum Norge with 20%.