Germany's RWE Dea is will not submit a plan for development and operation (PDO) for the Norwegian Sea Zidane development in October as planned, the firm has said, citing the need to improve the project's economics.
”Further value enhancement is required to make the project more robust” says RWE DEA managing director Hugo Sandal of RWE Dea Norge.
Zidane, discovered in 2010, is in production license 435, about 15km north-west of the Heidrun field.
The plan was to develop the field with a subsea template and a tie-in to the Heidrun tension leg platform platform (pictured), where the gas would be processed and exported further through the Polarled pipeline, in which RWE Dea and its Zidane partners are already owners. The Zidane and Heidrun partners have been negotiating regarding the Heidrun tie-in, but have so far not been able to resolve all issues, said RWE Dea.
"All main stakeholders have been working hard and have contributed constructively to get the project to its current status. However, there is a need to enhance the commercial value of the project further before the final investment decision can be taken. The partners in Zidane have therefore decided to spend more time to achieve this," the firm said.
”We had a clear target to deliver the PDO to the authorities now, but we have to improve the value of the project. Zidane is a significant gas resource for RWE Dea and in our opinion the field should be developed. RWE Dea as operator will do its utmost to bring Zidane on stream,” says Hugo Sandal.
”The important thing now for all parties is to look forward and work towards a solution. We are optimistic and believe that Zidane has the potential to become a good project both for the partners and society at large” says Project Manager Lars Moe.
The first exploration well on Zidane found a 150m gas column in the Fangst group. The second discovery was made in a separate structure in 2012, where gas was discovered in a 140m column, in the same interval. The resource estimate is 17.1 billion cu m gas and 0.4 million cu m condensate.
PPL435 is operated by RWE Dea Norge, which holds a 40% share in the licence. The remaining stake in the field is held by OMV Norge (20%), Maersk Oil Norway (20%) and Edison International Norway Branch (20%).
Subscribe
