NPD urges companies to explore proven gas resources on the Norwegian shelf

There are vast proven gas resources on the Norwegian shelf which are currently without development plans. Much of this gas is located in tight reservoirs – which makes it difficult to produce.

“Despite the significant uncertainty associated with how much gas we’re talking about, the cost level and future gas prices, our calculations show that the values involved are substantial,” says Arne Jacobsen, Assistant Director of Technology, analyses and coexistence.

A tight reservoir is a reservoir with low permeability (flow, in other words, how well a porous material can transport liquid or gas).

These reservoirs normally cannot be produced using conventional wells; profitable production can only be achieved by implementing measures to improve gas flow. So far, various forms of fracturing and multi-branch wells remain the most relevant methods for recovering resources in tight reservoirs.

Slim-hole technology is also relevant is several places, where a large number of slim boreholes in the same well will increase the wells’ contact surface with the reservoir (reservoir exposure) and make it easier for hydrocarbons to flow into the wells.

These methods and technologies have all been previously tested and applied on the Norwegian shelf, but are mainly used to extract additional oil. Elsewhere in the world, such as in the Gulf of Mexico, the UK shelf and on certain onshore fields, the technologies have been used to produce gas.

Time-critical resources

Production from tight reservoirs is frequently only profitable if the development is based on tie-backs to existing infrastructure. Large volumes and relatively low production rates result in a long production horizon, which underlines the importance of not postponing efforts until the field approaches its shut down date.

“These resources must be produced before the end of the infrastructure’s lifetime, which makes them time-critical in many instances. This is why it’s important to implement solutions that make it possible to produce them within the technical lifetime of existing infrastructure,” Jacobsen says.

The NPD’s primary goal is to contribute toward realising the greatest possible values for Norwegian society from the oil and gas industry through efficient and prudent resource management:

“We need to ensure that these values are not lost, and that the companies are doing enough to produce the difficult volumes as well,” Jacobsen says.

Broad cooperation

The NPD wants the companies to “leave no stone unturned” and determine if it is possible to produce remaining resources in a profitable way by utilising existing technology. One tool in this context can be coordination across fields and broad cooperation on the shelf, in general:

“It’s often expensive to implement technology, and profitability can be marginal. We encourage the companies to think outside the box and work across fields – and thereby achieve potential economies of scale,” Jacobsen says.

He believes there could be a potential for saving money by cooperating on, for example, planning, hiring vessels and drilling a certain number of wells in an area. Such campaigns are commonplace within e.g. light well intervention (maintenance on production wells that is normally carried out using vessels).

Tight reservoirs in all ocean areas

The NPD presented estimates for resources in tight reservoirs on the Norwegian continental shelf in its resource reports from 2017 and 2019, and concluded that there are considerable resources in tight reservoirs in all ocean areas on the NCS.

The North Sea

The estimate for mapped volumes in place in tight reservoirs in the southern part of the North Sea is in the order of 750 million m3 of oil and 90 billion m³ of gas. Most of this is located in chalk reservoirs in the Ekofisk, Eldfisk and Valhall area. Producible oil in basement rock has also been proven on the Utsira High. Basement rock consists of hard and tight rocks. However, the basement rock in this area is so fractured and porous that oil has migrated into it.

In the northern part of the North Sea, the mapped volume in place in tight reservoirs is estimated at approximately 360 million m³ of oil and 80 billion m³ of gas. In this area, a considerable percentage of the volumes are located in sandstone reservoirs. However, there are also substantial volumes on Oseberg and Gullfaks in the overlying Shetland Chalk and partly in the Lista Formation.

Test production of oil has been carried out in the Shetland Chalk on Oseberg. Licensees are considering testing the potential of different well stimulation methods. On Gullfaks, production is currently under way from the tight Shetland Chalk. Here they are using water injection and horizontal wells to improve recovery.

The Norwegian Sea

Mapped volumes in place in tight reservoirs in the Norwegian Sea are estimated at approx. 130 million m³ of oil and 420 billion m³ of gas. These volumes are located exclusively in sandstone reservoirs. A large percentage is located in the Tilje and Garn formations, which are deep and have highly variable reservoir properties.

The Lavrans, Linnorm, Noatun and Njord Nordflanken 2 and 3 discoveries all have tight reservoir zones where the licensees are still considering the possibility of development using different technologies to improve profitability. Slim-hole technology has been used in the tight zones in the Garn Formation on Smørbukk Sør. This technology has also been used in several other fields, such as Edvard Grieg, Valhall and Ivar Aasen.

This is an example of testing new technology to increase productivity in tight reservoir zones. Some discoveries are also relinquished because the licensees are unable to ascertain profitability in developing the tight reservoir zones. 6506/6-1 Victoria in the Norwegian Sea is one example of this. This discovery has considerable volumes in place, but has nevertheless been relinquished.

The Barents Sea

Mapped volumes in place in tight reservoirs in the Barents Sea are estimated at approximately 5 million m³ of oil and 270 billion m³ of gas. Since the Barents Sea is more of a frontier area than the North Sea and the Norwegian Sea, the resource base is more uncertain. The tight reservoirs in the Barents Sea are sandstone reservoirs from the Triassic.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/07122023/npd-urges-companies-to-explore-proven-gas-resources-on-the-norwegian-shelf/



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NPD discuss investments for the future on the Shelf

Only rarely have we seen so much oil and gas produced on the Norwegian shelf as was the case last year – and only rarely have we seen such significant investment decisions.

Norway has definitely fortified its role as a predictable, long-term supplier of energy to Europe.

2022 was a year marked by the war in Ukraine and the energy crisis. These factors also impacted activity on the Norwegian shelf. The disappearance of Russian gas on the European market led to greater demand for Norwegian gas, which caused Norway to become the largest supplier in Europe by the end of last year.

Some of the underlying causes for this development are that the authorities granted permits to increase production from several fields, there was a high degree of operational stability and Snøhvit also came back on stream after a lengthy shutdown.

Gas production was nine billion standard cubic metres higher in 2022 compared with the previous year. Gas now accounts for more than half of production from the Shelf. A total of 122 billion standard cubic metres (Sm3) of gas was produced.

Numerous investment decisions for new projects were also submitted in 2022.

“These are remarkable investments for the future. This will help ensure that Norway can continue to be a reliable supplier of energy to Europe”, says Director General Torgeir Stordal.

Stordal notes that this is good news for the Norwegian supplier industry, as well as for overall value creation and the welfare and prosperity that flow from the resources on the Shelf.

High production

Production is extremely high, and it will continue to grow in the years to come. Gas production is projected to remain at around 2022 levels for the next four to five years.

A total of approx. 230 million Sm3 of oil equivalent was produced in 2022 – which corresponds to about 4 million barrels per day.?

This consistent high production level can be attributed to three main factors, the first of which is the high number of producing fields on the Shelf (93).

In December, Johan Sverdrup Phase 2 came on stream in the North Sea. Nova has commenced production, Njord in the Norwegian Sea has started up following modification work, and several new fields are projected to start producing in the years to come.

And last but not least, older fields are producing longer, and producing more, than previously expected.

New development plans

A substantial number of decisions were made in 2022 regarding new developments that can help maintain this production. The authorities received 13 plans for new developments (PDOs), as well as several plans for projects aimed at increasing recovery near existing fields, or extending field lifetimes. Decisions have also been made to approve major investments on existing fields.

According to figures provided by the licensees, this entails total investments of around NOK 300 billion and an overall present value of NOK 200 billion. Together this amounts to a growth in reserves of 252 million Sm3 of oil equivalent, half of which is gas.

“It’s great that the industry is investing and making a commitment to developing the resources on the Norwegian shelf. Now we’ll expect the industry to demonstrate that it can implement these projects according to the plans, and thus provide a foundation for robust value creation and good resource management,” says Stordal.

The largest new project is Yggdrasil (previously called Noaka) in the North Sea, where investments are projected to reach NOK 115 billion. This development will help promote the establishment of new infrastructure on the Shelf.

“Good area solutions are incredibly important for the further development of the Norwegian shelf. Even small discoveries can become quite profitable if they’re tied into existing infrastructure,” says Stordal.

Exploration

32 exploration wells were completed last year. They resulted in 11 discoveries, several of which are smaller than expected. That is why resource growth is lower than in the three previous years.

“At the same time, it’s gratifying that the companies have shown a willingness to drill exploration wells that carry greater risk when it comes to finding oil or gas. This is typical in parts of the Shelf or the subsurface where no discoveries have been made previously,” says Stordal, who emphasises that the Lupa gas discovery in the Barents Sea, announced in December, is exciting.

The NPD expects the Barents Sea to hold significant undiscovered gas resources. A lack of infrastructure to export the gas has meant that the industry has been less eager to explore for gas in this area. More discoveries like Lupa could make development profitable, alongside investments in infrastructure to solve the transport challenge.

In January 2022, 53 new production licences were awarded in the Awards in predefined areas (APA) 2021, and there was also substantial interest in APA 2022, where the application deadline was in September.

Emissions are declining

Advances were made in carbon capture and storage last year. Longship will become a reality. Meanwhile, two injection wells were completed in the Northern Lights project, and good progress has been made in organising the terminal facility in Øygarden in Vestland county. Construction of the world’s largest CO2 transport ship is also under way.

There is growing interest in acreage for injection and storage of CO2. In 2022, the authorities awarded three exploration licences for storage of CO2, one in the Barents Sea and two in the North Sea. The initial objective of these licences is to determine whether these areas are suitable for CO2 storage.

Seabed minerals under consideration

Options are being explored as regards potential profitable mineral activity on the seabed on the Norwegian shelf. The objective here is to determine whether this could help secure a future supply of important metals in the transition to a low-emission society.

Once again in 2022, substantial efforts were undertaken to enhance the basis of knowledge regarding seabed minerals.

The NPD has analysed data collected from its own and other scientific surveys over a decade. This knowledge has led to a resource assessment.

The NPD has assisted the Ministry of Petroleum and Energy with an impact assessment in connection with the opening process for exploration for and production of seabed minerals.

The impact assessment is currently available for public consultation.

Long-term perspective

Stordal wants to emphasise that significant resources remain in place on the Shelf, both in fields, in discoveries and in potential discoveries: “The companies must continue to develop the fields, in part by drilling more development wells. They must mature more of the discoveries in their portfolios, and they must also approve decisions to develop more of them. Moreover, they should continue to explore for new oil and gas resources. This is the only secure pathway to make Norway a reliable, long-term supplier of energy to Europe.”

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/09012023/npd-discuss-investments-for-the-future-on-the-shelf/



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