Statoil sets sights on northern lights

Statoil will launch a drilling campaign in the Norwegian Barents Sea before the end of the year with four exploration wells in the Skrugard area, the company announced at this year’s Offshore Northern Seas (ONS) conference in Stavanger. But its Arctic ambitions go much farther, as Russell McCulley reports.

Statoil will spud the first of its planned Skrugard wells in the Barents – at Nunatak – in December and drill and complete four wells at the Nunatak, Kramsno, Skavl and Iskrystall prospects over the following six months. The Norwegian operator’s executive vice president of exploration, Tim Dodson, said at ONS that first production from Skrugard is tentatively scheduled for 2018.

The Norwegian Barents Sea is one of the Arctic’s less challenging areas because it lies in a year-round ice-free zone, he said. With the Arctic region believed to contain up to 25% of the world’s yet to be discovered hydrocarbons, ‘we believe these petroleum resources will be critical for a growing world’, he added. ‘We see great potential in the Arctic.’

‘So far, no robust solution exists for dynamic positioning in ice.’ Margareth Ovrum

The drilling program will continue with two to three wells in the Hoop prospect in summer 2013 targeting shallow reservoirs 600m below the surface, Dodson said. Hoop includes the Atlantis and Apollo fields and will mark the northernmost wells drilled in Norway.

‘We see great potential in the Arctic.’ Tim Dodson

Seadrill’s West Hercules semi will conduct drilling under a five-year contract.

Later in 2013, Statoil will return to the Hammerfest Basin to drill exploration wells at Ensis and Askepott near the existing Goliat and Snøhvit discoveries.

Statoil also plans to triple its Arctic research budget from NKr80 million in 2012 to NKr250 million next year, said Margareth Ovrum, EVP of technology, projects and drilling. Ongoing research includes the development of an Arctic drilling rig capable of dynamically positioned station-keeping at shallow water depths of 40m. ‘So far, no robust solution exists for dynamic positioning in ice,’ Ovrum noted.

Statoil used the biennial ONS conference and exhibition to set out its multi-year strategy for exploration in the Arctic, which the company says could contain 20%-25% of the word’s undiscovered conventional oil & gas reserves.

In May 2012, Statoil entered a joint venture agreement with Rosneft to team up on bidding for Arctic licences offshore Norway and to explore the Perseevesky block in the Russian Barents Sea and the Magadan 1, Lisyansky and Kashevarovsky blocks in the Sea of Okhotsk. Drilling in the Russian Arctic could begin in 2016, Dodson said.

Statoil has contracted Seadrill’s West Hercules ultra-deepwater semi for its Arctic exploration programme. The rig has been prepared for Arctic conditions and is scheduled to begin drilling the Skrugard prospect in December.

Meanwhile, Statoil has secured Seadrill’s West Aquarius rig for a threewell drilling programme offshore Newfoundland, Canada to begin later this year. The wells are planned for the Harpoon and Cupid prospects in the Flemish Pass and the Federation prospect in the Jeanne d’Arc Basin. Seismic exploration is under way in Beaufort Sea licence 460 offshore western Canada, where Statoil holds 40% interest with operator Chevron holding 60%. Seismic data acquisition is also being gathered at the Shell-operated Anu and Napu prospects offshore west Greenland, in blocks 5 and 8, respectively. Statoil holds non-operating interest in the blocks, and in early 2012 acquired a 30.6% stake in the Cairn Energyoperated Pitu prospect, in block 6. Dodson said the company would make a ‘drill or drop’ decision for the Pitu block next year.

Although Ovrum stressed the need for greater co-operation among operators to overcome the considerable technological challenges of Arctic E&P, she said Statoil is working in-house on the Arctic rig concept and development of seismic data acquisition in ice conditions. According to earlier Statoil briefings, the rig will operate in a range of Arctic water depths ‘and will involve integrated operations in drifting ice’.

Statoil and researchers from the Norwegian University of Science & Technology launched a research cruise to northeast Greenland in September. The mission will test technologies in ice management, Ovrum said.

Norway will hold a Barents Sea drilling round in spring of 2013, with 72 offshore blocks on offer.