Statoil Reduces Costs of Mikkel Project in the North Sea

The estimated cost of Statoil's Mikkel project in the Norwegian Sea has been reduced by 20 percent compared with the plan for development and operation (PDO) approved in 2001.

With gas and condensate deliveries due to start on October 1st, total investment in Mikkel is now expected to be around NOK 1.85 billion – more than NOK 500 million below the PDO estimate.

The cost of expanding gas processing capacity at the Karsto complex north of Stavanger to handle Mikkel output has also been cut by 30 percent from the original NOK 1.1 billion estimate. As technical services provider for this facility, Statoil has carried out the Mikkel development at Karstø on behalf of operator Gassco.

Mikkel has been developed with seabed installations tied back to Statoil's Aasgard B gas platform via the subsea facilities on Midgard, part of the Aasgard Field.

This makes it the first Norwegian field to send its wellstream from one subsea system to another owned by a different licensee group. Statoil has developed and installed underwater metering equipment to monitor the Mikkel wellstream.

After separation, the rich gas is piped to Kårstø through the Aasgard transport trunkline.

"We've managed to reduce costs by sharing resources with the Aasgard organization for platform modifications and subsea operations," explains Mikkel project manager Harald Vandbakk. "A number of methods which are simpler than those originally specified have also been developed."

The total gross value of Mikkel is estimated to be NOK 25 billion, but Mr. Vandbakk reports that this figure could be adjusted upwards. Recoverable reserves in the field are put at 20 billion cubic meters of gas and roughly 35 million barrels of condensate. Plateau output will be 5.8 million cubic meters of gas per day.