Artist’s impression: Statoil.
After much work and several postponements, the Snorre licensees agreed last autumn that a new platform is the best answer for recovering the field’s remaining petroleum. “The resource base is big, but we need to get going,” says Kjell Morisbak Lund, Petoro’s vice president for licences.
He describes the Snorre 2040 project as the biggest improved oil recovery (IOR) scheme on the Norwegian continental shelf (NCS).
This field has the second-largest residual reserves of any Norwegian field after Ekofisk. Including a new platform, they are comparable with reserves estimates for the Johan Castberg discovery in the Barents Sea.
Opting for a new surface installation represents an important step towards harnessing these assets, but a final investment decision for Snorre 2040 remains to be taken.
A number of technological solutions have been assessed in the project. These also include utilising the existing Snorre A and B platforms and expanding the subsea facilities tied back to these.
The choice has ultimately fallen on a third platform, but Lund emphasises that a new installation has not been a goal in itself.
“Various solutions give different opportunities to drill wells. A platform offers many more additional wells than the other options, which ultimately determines final recovery.”
Kjell Morisbak Lund is Petoro’s vice president for licences. Photo: Emile Ashley
The new Snorre C facility is planned as a wellhead platform tied back to the existing installations to ensure maximum use of total capacity on the field. It will therefore also carry some process equipment.
An investment estimate of roughly NOK 30 billion is a substantial sum, particularly in conditions where the players are setting ever stricter priorities.
“We’ve concentrated on analysing the revenue side of the project,” explains Lund. “The licence has chosen the solution with the best economics over Snorre’s producing life. This is case where the largest spending yields the biggest return.”
Petoro’s evaluations of the reserve base have consistently been higher than those of its partners. And reserves in the field have shown a rising trend.
“We’ve worked very intensively on this, both on our own account and with the operator and the other partners,” says Lund. “The more we’ve worked, the bigger the reserves we’ve seen. This is clearly a profitable project.”
In his view, the high level of activity on the NCS shows that this region ranks among the most attractive petroleum provinces in the world.
A decision on continuing Snorre 2040 is due in the first quarter of 2015, and the final go-ahead in the following year. With profitability in the project being time-critical, Lund is concerned to maintain this schedule.
“The reserves will be there regardless of what we do, but their commerciality will deteriorate the longer we wait,” Lund observes.
“That’s because production depletes the field with every passing year, reservoir pressure falls and fewer barrels are left to bear the additional investment. Per-barrel costs can become so high that profitability disappears.��
He is satisfied that the partners have collectively arrived at a good technical solution. Other options assessed would have left substantial petroleum resources behind.
“This project shows how we can be an active contributor to developments in our portfolio. We see the strategic significance of long-term thinking – and in this case the profitability is clear.
“The NCS has a big reserve potential. Experience from other mature Norwegian and British fields shows how crucial it is to apply IOR measures as early as possible.
“Both technical and commercial life are significant for total field recovery. If we wait too long to take the right action, the whole basis for the project could erode – literally.”