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Released January 13, 2015 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Oil production has started at the Eldfisk II project in the Norwegian North Sea at a time when weak oil prices are forcing many Norwegian projects to be scrapped or postponed.
The project is designed to increase oil recovery from the old oil field and will have a capacity of 70,000 barrels of oil equivalent (boe) per day, according to project partner, France's Total S.A. (NYSE:TOT) (Paris, France).
The project is located in the PL 018 licence zone approximately 300 kilometres (km) off the coast of Norway.
"Eldfisk came on stream in 1979 and the field still has significant reserves," said Michael Borrell, Total's Senior Vice President Exploration & Production, Europe and Central Asia. "The Eldfisk II project should extend the lifespan of Eldfisk for some 40 further years. Following the start-up of Ekofisk South at the end of 2013, the start-up of Eldfisk II demonstrates once again the potential for value creation in mature fields such as the Greater Ekofisk Area."
Eldfisk II consists of a new platform (Eldfisk 2/7S), a substantial upgrade of the existing Eldfisk facilities and the drilling of 40 new production and injection wells. The project is owned by Total (39.9%), ConocoPhillips (NYSE:COP) (Houston, Texas) (35.1%), Italy's Eni (12.4%), Norway's Statoil ASA (NYSE:STO) (Stavangar, Norway) (7.6%) and Petoro AS (5.0%).
The start-up comes at a time when Norway's oil sector and economy is reeling from the global slump in oil prices, forcing the Central Bank to cut interest rates to their lowest since 2009.
"Growth prospects for the Norwegian economy have weakened," admitted Norges Bank. "Activity in the petroleum industry is softening and the sharp fall in oil prices is likely to amplify this tendency. This will have spill-over effects on the wider economy and unemployment may edge up ahead. At the same time, the kroner has depreciated markedly, which is helping to dampen the effects on the Norwegian economy and underpin inflation."
Statoil, which is mostly owned by the Norwegian state, operates 70% percent of Norway's oil and gas production. It is in the middle of a major restructure as it fights to boost profitability and combat over capacity. Last February is set out plans to cut its investments by 8% until 2016, sell assets and reduce production. Thousands of jobs at Statoil and at companies it works with have been lost in the past year.
Last month, the company extended the suspension periods for the drilling rigs COSL Pioneer, Scarabeo 5 and Songa Trym due to overcapacity.
"When the rig contracts were signed it was challenging to ensure sufficient rig capacity," explained Statoil procurement head Jon Arnt Jacobsen. "Today the activity is facing lower margins, a generally high cost level and subsequent lower profitability. These measures are necessary due to the overcapacity of rigs compared to the assignments we are prioritising. This situation is unfortunate, and we are doing what we can to minimise the extent of the suspensions."
In September Statoil announced the start of production at two new wells in the North Sea. Production start-up began at the Fram H-North and Svalin C fields, which are expected to yield more than 40 million barrels of recoverable oil equivalent (BOE). For additional information, see September 15, 2014, article - Statoil Begins New North Sea Production.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
The project is designed to increase oil recovery from the old oil field and will have a capacity of 70,000 barrels of oil equivalent (boe) per day, according to project partner, France's Total S.A. (NYSE:TOT) (Paris, France).
The project is located in the PL 018 licence zone approximately 300 kilometres (km) off the coast of Norway.
"Eldfisk came on stream in 1979 and the field still has significant reserves," said Michael Borrell, Total's Senior Vice President Exploration & Production, Europe and Central Asia. "The Eldfisk II project should extend the lifespan of Eldfisk for some 40 further years. Following the start-up of Ekofisk South at the end of 2013, the start-up of Eldfisk II demonstrates once again the potential for value creation in mature fields such as the Greater Ekofisk Area."
Eldfisk II consists of a new platform (Eldfisk 2/7S), a substantial upgrade of the existing Eldfisk facilities and the drilling of 40 new production and injection wells. The project is owned by Total (39.9%), ConocoPhillips (NYSE:COP) (Houston, Texas) (35.1%), Italy's Eni (12.4%), Norway's Statoil ASA (NYSE:STO) (Stavangar, Norway) (7.6%) and Petoro AS (5.0%).
The start-up comes at a time when Norway's oil sector and economy is reeling from the global slump in oil prices, forcing the Central Bank to cut interest rates to their lowest since 2009.
"Growth prospects for the Norwegian economy have weakened," admitted Norges Bank. "Activity in the petroleum industry is softening and the sharp fall in oil prices is likely to amplify this tendency. This will have spill-over effects on the wider economy and unemployment may edge up ahead. At the same time, the kroner has depreciated markedly, which is helping to dampen the effects on the Norwegian economy and underpin inflation."
Statoil, which is mostly owned by the Norwegian state, operates 70% percent of Norway's oil and gas production. It is in the middle of a major restructure as it fights to boost profitability and combat over capacity. Last February is set out plans to cut its investments by 8% until 2016, sell assets and reduce production. Thousands of jobs at Statoil and at companies it works with have been lost in the past year.
Last month, the company extended the suspension periods for the drilling rigs COSL Pioneer, Scarabeo 5 and Songa Trym due to overcapacity.
"When the rig contracts were signed it was challenging to ensure sufficient rig capacity," explained Statoil procurement head Jon Arnt Jacobsen. "Today the activity is facing lower margins, a generally high cost level and subsequent lower profitability. These measures are necessary due to the overcapacity of rigs compared to the assignments we are prioritising. This situation is unfortunate, and we are doing what we can to minimise the extent of the suspensions."
In September Statoil announced the start of production at two new wells in the North Sea. Production start-up began at the Fram H-North and Svalin C fields, which are expected to yield more than 40 million barrels of recoverable oil equivalent (BOE). For additional information, see September 15, 2014, article - Statoil Begins New North Sea Production.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
