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Norway: Statoil Plans to Establish New Operational Area on NCS

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Statoil said it intends to establish a new operational area on the Norwegian continental shelf, which will be based in Harstad with start-up in the first half of 2013.

Statoil is setting up a separate operational area in Northern Norway due to the considerable increase in activities taking place off the three northernmost counties in Norway.

“This will boost our presence in Northern Norway and help ensure added value from the Northern fields in the future. Ever since the merger in 2007, and the setting up of Operations North in Stjørdal, we have expressed our intention of establishing a new operational area in the North when activities and materiality justified such an industrial decision – and we are now seeing that level of activity,” states Statoil CEO Helge Lund.

Lund adds that there are also expectations of further activities in Northern Norway, owing to the increase in exploration in newly opened acreage, and in areas expected to be made available to the petroleum industry; initially the Barents Sea, and subsequently areas in the north-eastern Norwegian Sea.

Increased activity in Northern Norway

To begin with the new operational area will be responsible for the already operative Norne and Snøhvit fields, as well as for the Åsta Hansteen field, for which a decision will be taken later this year. In due course the Skrugard/Havis field will also report to the new operational area, which will be managed along similar lines and carry the same executive authority as other operational areas.

Meanwhile, it is the intention to locate the Åsta Hansteen field’s operational organisation in Harstad, the supply base in Sandnessjøen and the helicopter base in Brønnøysund. These choices have been made after consultation with the partners on the field and final decisions here will be taken in connection with the impact assessment study.

“In wishing to base the Åsta Hansteen operational organisation in Harstad, we are envisaging the possibility of synergy effects obtained from a joint localisation with the Norne field. A new operational organisation will also boost competence and enhance the specialist milieus in Harstad,” says the executive vice president for Development and Production Norway, Øystein Michelsen.

The creation of this new area of operations will entail an increase in the number of employees at the Harstad office. Once the decision on Åsta Hansteen is taken, more employees will join the new area; overall the increase is likely to amount to some 30-50 persons.

Work on the detailed planning of the new operational area in Northern Norway is now getting under way. The area will commence its operations in the course of the first half of 2013.

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Major Oil And Gas Finds In northern Europe

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Written by: EurActiv
January 10, 2012

Norway’s Statoil has made a second big oil discovery in the Barents Sea in less than a year and predicted more discoveries to come in the region.

The new oil find, called Havis, may hold between 200 million and 300 million barrels of oil equivalent (boe). The new find combined with the previous and nearby discovery, Skrugard, could provide between 400 million and 600 million boe, Statoil said yesterday (9 January).

“This is extremely positive,” said John Olaisen, an analyst at the Carnegie investment banking firm in Oslo. “This is an important strategic asset in a new oil region, so this is very good … One could expect more oil finds in the region after this.”

A Shell and ExxonMobil joint venture, Nam, has also announced what it says is the largest on-shore gas field discovery in the Netherlands since 1995, near Ee, in Friesland.

Production at the South Metslawier site, which is estimated to hold 4 billion cubic metres of reserves, is expected to begin in the summer, and last until 2015.

The Norwegian find in the Barents Sea, followed a carve-up of the territory in 2010 between Norway and Russia.

The Arctic region holds 25% of the world’s hydrocarbons, according to the US Geological Survey.

Norway is the world’s eighth-largest oil exporter and the second-largest for gas, which has seen declining oil output since 2001, following a string of offshore discoveries made over the past year.

Finding oil in the Norwegian part of the Barents Sea had until recently proven to be very difficult.

Over the past 30 years oil companies have drilled 92 exploration wells but only a handful have proven to be hits – Skrugard, Statoil’s Snoehvit gas field, Eni’s Goliat oilfield and Total’s Norvarg discovery.

Statoil now expects to strike more oil in the region around Havis.”We believe we now understand (the geology) and have cracked the code in this area,” the company’s chief executive Helge Lund said.

“We think we will be able to make additional finds in this licence in the future,” he said.

Production at Havis is expected to begin before the end of the decade.

The partners in the latest oil find are Statoil (50%), Italy’s Eni (30%) and Norwegian state-owned firm Petoro (20%).

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Norway: Statoil Steps Up Technology Efforts to Increase Production

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Norway’s Statoil has singled out four business critical technologies as key to achieving the company’s growth ambitions. Statoil is boosting its R&D investments by 27% and starting to plan Norway’s biggest centre for IOR technology.

In the period up to 2020 Statoil will maintain a high level of production on the Norwegian continental shelf while doubling its international production.

“The oil and gas industry is facing new technological challenges that differ from those we have dealt with so far. We will find the resources of the future at great oceanic depths, in arctic areas where the conditions are extreme, and in new resources such as shale gas and shale oil for example. Statoil is well positioned to lead the continuing development of the oil and gas industry,” says Margareth Øvrum, executive vice president for Technology, Projects and Drilling.

Statoil is now stepping up its technology efforts in order to boost production, reduce energy consumption and support the company’s growth ambitions. Specifically this will mean tougher technology priorities, closer cooperation and the swifter implementation of technology.

Statoil’s new technology strategy builds on the company’s ambitions to boost production from 1.9 million barrels of oil equivalents per day in 2010 to 2.5 million boed in 2020.

The four prioritised technology areas are:

  • Seismic imaging and interpretation – will contribute to making further discoveries and boost the recovery rate by 2020.
  • Reservoir characterisation and recovery – to maximise value. Will contribute to the production a further 1.5 billion boed in reserves by 2020.
  • Efficient well construction – to drill more cost-efficient wells: 30% shorter time on well construction and 15% cost reduction by 2020.
  • Realise subsea compression by 2015 and complete a “subsea factory” by 2020 – to accelerate and boost production.

“We have identified four commercially critical technology areas where Statoil has a competitive advantage and where we have a long history of making the impossible possible. We have set ambitious targets for how technology will help us make further discoveries, boost recovery from existing fields, reduce costs and bring about operational improvements in health, environment and safety,” says Øvrum.

Statoil is increasing its concentration in R&D and IOR (Improved Oil Recovery).

“For 2012 we are increasing our R&D investments by 27% to NOK 2.8 billion. We are also planning for a further increase in our R&D activities going forward. In addition, we have specific plans to expand our R&D Centre at Rotvoll in Trondheim to provide room for Norway’s biggest IOR Centre,” says Øvrum.

“Our technology advances would not have been possible without the solutions developed by an innovative and dynamic supplier industry, as well as by universities and research institutes. In order to succeed in our four prioritised technology areas we require new solutions and closer cooperation with our suppliers, national and international research milieus, and other partners.”

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Norwegian giant in it for the long haul with Texas shale venture

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Helge Lund (left), CEO of Norwegian energy company Statoil, speaks with Statoil Joint Venture Manager Cesar Alvarez (facing away) and Talisman Energy Frac Specialist Nabila Larsen (right) at a Talisman Energy fracking site near Cotulla, Texas. Statoil is working with Talisman energy to develop oil and gas ventures in the Eagle Ford shale formation in south central Texas. (Photo: JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS)

LA SALLE COUNTY – Helge Lund, CEO of Norway’s Statoil, likes to say his company is more than just a financial investor in shale gas fields in the U.S., and he made that abundantly clear one morning last week.

Up before dawn, the tall, soft-spoken Norwegian ate breakfast tacos and endured a long drive on bumpy dirt roads before arriving at a remote well site, about 100 miles south of San Antonio, where mesquite and prickly pear blanket the dusty landscape and deer, jackrabbits and rattlesnakes are the primary residents.

His mission was to get an up-close look at an operation in the Eagle Ford shale formation, where the company launched a joint venture last year, and he spent several hours in the sweltering South Texas sun doing just that.

“The key point for us is we do not look at this as a short-term investment,” said Lund, 48, wearing thick red coveralls, steel-toe boots and a hard hat. Rather, he said, it is an important part of the company’s future.

Last fall, Statoil announced it would pay $1.3 billion for properties in the Eagle Ford shale formation and team up with Canada’s Talisman Energy to develop them. Two years earlier, the Norwegian oil giant paid roughly the same amount for a stake in Marcellus shale properties in the Northeast U.S. operated by Chesapeake Energy.

Statoil is among a number of foreign oil companies including France’s Total, China’s Cnooc and Australia’s BHP Billiton that are paying huge sums to enter U.S. shale rock formations, where recent breakthroughs in drilling and extraction technology – pioneered by small U.S. producers – have put massive quantities of natural gas within reach.

A push to diversify

But Statoil, two-thirds owned by the Norwegian government, faces special pressure to diversify its production beyond Norway, where mature offshore fields in the North Sea are in decline and taxes are high.

As such, it has focused on North America, where it also is a major leaseholder in the Gulf of Mexico, has exploration acreage in Alaska, operates an oil sands project in Canada and is drilling off the Canadian eastern coast.

“The next 10 years, we will probably have steeper growth in North America than in any other region of the world,” said Lund, who expects a fivefold increase by the end of the decade in Statoil’s North American production, now roughly 100,000 barrels of oil equivalent per day.

Sharp increase is goal

The company has a broader goal over the same period to boost global output to 2.5 million barrels per day from about 1.9 million barrels today, as fields also come online in Brazil and elsewhere.

Statoil also might consider partnerships to explore in the Arctic, like one announced late last month by Exxon Mobil Corp. and Russia’s Rosneft.

“I cannot rule that out,” said Lund, noting that the Arctic will be another focus area for the company moving forward.

But he is the first to acknowledge that while Statoil is a skilled offshore operator, particularly in harsh climates, it still has much to learn in the onshore unconventional gas business. That’s why Talisman is taking the lead in operating wells in the Eagle Ford, while Statoil serves as understudy.

Statoil will begin operating wells under the joint venture by as early as the end of next year, though details of how the two companies will divide things up remain in discussion, Lund said.

The Eagle Ford shale, which is 450 miles long and 50 miles wide and runs in a crescent-shaped band below San Antonio, has been attractive to oil companies because, in addition to gas, it contains more valuable supplies of oil, condensate and natural gas liquids.

Houston’s Marathon Oil Corp., for instance, inked a $3.5 billion deal in June to acquire 285,000 acres in the formation, while Shell, ConocoPhillips and others also have positions.

But it can be challenging to develop the Eagle Ford’s deep high-pressure wells, and the mix of gas or liquids can vary widely from zone to zone.

Scales and fangs

Then there’s the matter of the neighbors.

“Rattlesnakes are really bad out here,” said David Peterson, a safety consultant to Talisman at the well site.

Sven del Pozzo, an industry analyst with IHS-Herold in Stamford, Conn., said such challenges will be difficult to navigate for companies like Statoil with little experience in shale plays.

“This is new for them,” he said. “It’s going to take some time to get it right.”

Since December, Talisman has drilled 22 wells under the joint venture, said Chris Jeske, manager of Talisman’s Eagle Ford unit. It’s run from The Woodlands, where half a dozen Statoil employees are working and more are coming.

The joint venture now has eight rigs in the formation, will increase that to 14 by the end of next year and then has plans to drill up to 200 wells a year, Jeske said.

The partnership controls roughly 170,000 acres across La Salle, McMullen, Live Oak, Bee, Karnes and DeWitt counties.

While Statoil is focused first on becoming an operator in the Eagle Ford and sees more opportunity for shale acquisitions in the U.S., “we are looking at opportunities outside North America as we mature our approach,” Lund said.

Possible areas for expansion could include Asia, South America and Europe.

He said Statoil also has had talks with China National Petroleum Co. on a possible joint venture to develop shale acreage in China, though he declined to discuss specifics.

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