Equinor announced on Monday that it has discovered oil and gas in separate formations of cut by the same well, and all indications are that a new oil-heavy play in a Norwegian Sea gas province may create a rush to oil if the area’s notoriously splintered geology can be mastered.
Judging by licensing round nominations, operators are planning new drilling campaigns in an area where the Norne floating production, storage and offloading unit (FPSO) was, for years, the most noteworthy nearby oil infrastructure. For Equinor’s new discovery, it might be the only shot at speedy tie-in production.
Otherwise, oil in the Norwegian Sea is mostly produced as “associate” well stream, and the area accounts for less than 20% of Norwegian oil and gas production despite being vast at 1.4 million square kilometers. Interest in the high-pressure, high-temperature Norwegian Sea means only the best suppliers are invited due to the implied, extra safety considerations.
The oil discovery is sure to attract admittedly oil-focused companies like Lundin Petroleum, and already development of the new discovery being likened to Wintershall’s Maria development.
The latest well — called Black Vulture or Snadd Outer Outer — was the fourth well drilled in production license 159 B, a 1989 acreage award. It was drilled to 3,200 meters below the seabed by the Transocean Spitsbergen, the advanced rig a signal that only the best mobile offshore drillers will likely see action as the Norwegian Sea attracts more oil activity.
Equinor acknowledged that it has existing infrastructure nearby, but most of this comprises gas pipelines. Only the Norne FPSO has been named as a possible tie-in site.
The Norne field, 14 kilometers away, is about 50-50 gas and oil and is produced as an oilfield from an FPSO that could be the production point due to an area lacking oil infrastructure. The largest oilfield in the area is Aasgard, and it is two-thirds gas
While Equinor produces nearly 800,000 barrels of oil equivalents per day in the Norwegian Sea, most of it is gas and condensate. Now, Equinor and partners DNO (32%) and Ineos E&P (15%) are looking at a large gas area above a hard-to-reach oil reservoir which nevertheless contains upwards of 60 million barrels of oil equivalent, three-quarters of it oil.
Nick Ashton, Equinor’s exploration director for the Norwegian and British continental shelf, said that deeper oil layer was a “small success story for chalk reservoirs off the coast”, adding that it would be natural to keep studying the area.
After all, oil increasingly being found in the Norwegian Sea gas province. Monday’s announcement capped 11 other discoveries sure to lure others.
Carmen and Osprey proved as much as 39 million barrels of oil equivalents in 2017; Hades, Iris, Balderbraa and Cape Vulture together proved up to 435 MM boe in 2018. In 2019, Ragnfrid Nord, Jasper and Snadd Outer Outer / Black Vulture have proven between up to 101 MM boe.
That’s as much as 575 MM boe in proven reserves, 80% of it said to be recoverable and commercial. Past announcements reveal much of it is oil.
The 16 2019 Equinor license awards in the most recent Awards in Predefined Areas points to more Norwegian Sea exploration. The trend, including at Black Vulture, is that this gas field will be explored for its oil.
“One possible solution we want to look at is to connect the discovery to the Norne ship. The Cape Vulture discovery has already more than doubled the remaining oil resources that can be produced through the Norne field, and it is a clear goal for us to further increase the reserves around the Norne field,” Ashton was quoted as saying.
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