Statoil announced this May its plans for fast-track field developments on the Norwegian shelf. It is just the beginning of an unprecedented drive to use off-the-shelf type solutions that will in the future bring smaller fields onstream in half the time and one-third the cost.
Over the next three years, the Norwegian energy company plans to develop nine small discoveries in the North Sea and Norwegian Sea. The first four were launched this January: Visund South, Stjerne (formerly Katla), Vigdis NorthEast and Hyme (formerly Gygrid). They will all be built using standardized solutions instead of more expensive tailor-made ones. The first field will be Visund South, which is expected to come onstream in 2012.
Statoil aims to complete the Visund South project in a little more than three years from discovery to first oil, compared to the original timeline of five years, and reduce costs by about 10%. The ambition is that by 2014, Statoil will be able to save 30% on all fast-track field developments, according to Halfdan Knudsen, Statoil vice president of the Norwegian Continental Shelf fast-track portfolio.
The bulk of the savings at Visund South will come from cuts in the execution time, he says. Much of the standard equipment can be pre-ordered earlier, the work process simplified, and the drawings re-used because the same type of equipment is being used time and time again. These types of smaller discoveries can be developed for example with one seabed template and just a few wells.
“Half of the investment is in drilling the wells, so to reach the goal of 30%, you have to standardise the drilling on the fast-track wells” said Knudsen. “We have allocated two drilling rigs for fast-track projects and installed workover systems on these rigs. It is a very important contributor to reducing the cost and being more efficient.”
Part of the drive for simpler solutions for smaller fields has been the lack of major discoveries on the maturing Norwegian shelf, which reached peak oil production in 2001. Output at the newer minor discoveries is not sufficient to compensate the decline in the older larger fields and there is a shortfall in new resources. In 2010, the Norwegian Petroleum Directorate reduced its estimates of undiscovered resources on the Norwegian shelf from 3.3 to 2.6 billion standard cubic metres of oil equivalents.
“Earlier the focus was on larger developments,” said Knudsen. “Now three out of four candidates are classified as small, so we now have to focus on smaller discoveries. That’s why it is important to do it efficiently.”
The company aims to have five fields in operation by early 2012 and deliver five new projects each year in the future. These include fields such as GammaHarepus, Snorre B template, Fossekall/Dompap, Visund North and Vilje South. This would give approximately 87,000 barrels per day in additional oil production by 2014, bringing Statoil’s share up to 176 million barrels in recoverable reserves from fast-track field developments.
“It’s a main part of our drive to add up to 650,000 barrels per day (of new production) by 2020,” said Knudsen.
Statoil has been working actively with fast-track suppliers to help drive costs down by entering frame agreements using existing technology, competitive bidding, and bundling the scope to increase synergies. The types of contracts include subsea production system, workover systems, drilling and well, linepipe, marine installations, and topsides modifications.
FMC Kongsberg Subsea was the first to receive a contract for Statoil’s four first fast-track field developments. The company won a contract in June 2010 for the manufacture of four subsea production trees, wellheads, choke modules and subsea control modules, as well as a template and manifold structure and control systems. All equipment was based on a subsea standard solution designed by Statoil and FMC.
The award included options for the supply of subsea production systems for three additional fields. FMC received the latest agreement with Statoil in June for the manufacture and supply of subsea production equipment to support the Visund North field development. The USD 50 million contracts marks the fifth fast-track project awarded from Statoil in the last two years, according to Tore Halvorsen, FMC Senior Vice President of Global Subsea Production Systems.
"We are pleased that Statoil continues to recognize our strengths and capabilities in supporting their tie-back and fast-track developments," Halvorsen said in a press release.
FMC’s competitor Aker Solutions was awarded a NOK 1 billion contract in May for the engineering, procurement and construction of a subsea production system in the fast-track project Fossekall-Dompap. The deal includes several template manifold structures, a range of subsea trees, a control system and a tie-in system. The contract also includes options for more Norwegian field developments.
“By utilizing simplified and standardised solutions and existing frame agreements, we are able to put out contracts more quickly,” said Vidar Birkeland, Statoil project procurement vice president, in a statement. “We need to keep up the tempo to reach the company’s goals, and this contract award is yet another example of us steadily increasing the pace.”
“With this contract we’ve secured deliveries for a long period of time from both Fossekall and Dompap, and are on route to start-up in late 2012,” said Knudsen. “We are focusing our energies in and around Norne because we have spare capacity in a well-known and developed area. Fossekall and Dompap are the first fast-track projects in the Norne area and secure increased production time there.”