New frontiers in the Norwegian oil & gas industry

Since the Ekofisk discovery in 1969, oil and gas have been a constant source of good news for Norway. It is estimated that more than NOK 5,000 billion has been generated by production on the Norwegian Continental Shelf (NCS), which represents the largest single-industry contribution to the Norwegian economy. But any fears that after more than thirty years of production, oil and gas are running out can be laid aside. Norwegian oil production has maintained a consistent average of around 3 million barrels a day since 1995, and with gas production set to increase from 35 to 50% by 2013, the industry is in an enviable and, for the time being, sustainable position. Perhaps most telling of all is the fact that two thirds of the oil and gas resources on the NCS are still to be exploited.

Since the Ekofisk discovery in 1969, oil and gas have been a constant source of good news for Norway. It is estimated that more than NOK 5,000 billion has been generated by production on the Norwegian Continental Shelf (NCS), which represents the largest single-industry contribution to the Norwegian economy. But any fears that after more than thirty years of production, oil and gas are running out can be laid aside. Norwegian oil production has maintained a consistent average of around 3 million barrels a day since 1995, and with gas production set to increase from 35 to 50% by 2013, the industry is in an enviable and, for the time being, sustainable position. Perhaps most telling of all is the fact that two thirds of the oil and gas resources on the NCS are still to be exploited.

Norway’s strong reliance on alternative energy sources for domestic usage – hydropower and wind power are the source of nearly all its domestic energy – gives it an enhanced status as an energy supplier, exporting 90% of its total petroleum production. In European terms, Norway is dominant, owning around half of remaining petroleum sources across the continent. But it is arguably not the quantity of resources alone that mark Norway out as a global giant. Instead, the management of the industry, backed by forward-thinking investment strategies to secure long-term success, a firm commitment to safety and the environment, and technological and methodological research are the bedrocks of current success.

Global giant StatoilHydro, formed after a merger between Statoil and the oil and gas division of NorskHydro in 2007 is the world’s biggest offshore oil and gas company, and plays a correspondingly important role. Simultaneously, national technology strategies such as OG21, a task force established by the Ministry of Petroleum and Energy (MPE) in Norway in 2001 has had recent vital contributions in terms of technology strategy in research and development, in connection with current Research Council of Norway initiatives such as Petromaks and PetroForsk and other industry initiatives like Deep Community. The net result is a burgeoning, vibrant industry with an exciting future to look forward to.

High oil prices and increased gas production are the themes of 2008, leading to an expected increase of NOK 100 billion this year. “Ever-increasing investments show that the activity level on the Norwegian continental shelf is still high,” says Terje Riis Johansen, Minister of Petroleum and Energy.

The Norwegian oil and gas industries are in a healthy position, with two thirds of oil and gas resources on the Norwegian Continental Shelf still to be exploited.
© Øyvind Hagen / StatoilHydro.

Old & New Possibilities on the NCS
The Norwegian Petroleum Directorate’s (NPD) latest figures show that the average daily production in August 2008 was 1,993,000 barrels of oil, 250,000 barrels of NGL (Natural Gas Liquids) and about 64,000 barrels of condensate. The total of 2,306,000 barrels is similar to the average during 2008 of 2.1 million barrels of oil and about 2.5 million of liquid. The total production, 159.8 million Sm3 o.e. is 3.6 million Sm3 o.e. higher than during the same period the previous year.

New oil and gas discoveries have been made regularly during 2008. Recently, StatoilHydro concluded drilling of wildcat well 6407/7-8 in the Norwegian Sea, which proved gas/condensate. Discoveries have also been made in the harsh environs of the Barents Sea, for example gas from wildcat well 7226/2-1. In the North Sea, BG Norge AS proved an oil accumulation at well 34/3-1, north-east of the Snorre field. The list of such discoveries this year has been extensive. For the long-term future of production on the NCS, the size and number of new discoveries is the crucial factor.

The Ministry of Petroleum and Energy has also been forthright in encouraging the exploration in mature fields, where smaller discoveries are the norm. Forty-seven companies applied for the awards in pre-defined areas (APA) 2008, ahead of the issuing of new production licenses in early 2009. “It is positive to see that many companies still find interesting opportunities in areas that have been available for exploration for several years. Several new companies among the applicants also reflect the diversity on the Norwegian shelf,” says Terje Riis-Johansen. “The broad interest for APA 2008 shows that there is still a broad interest for mature areas on the Norwegian shelf.”
Norwegian giant StatoilHydro is looking to new technology to maintain high levels of production now that the “easy” oil gone.
© Leif Berge / StatoilHydro

StatoilHydro – New Discoveries Allied to New Technology
In a recently published report on the North Sea Dagny discovery, the Senior Vice President for StatoilHydro’s exploration on the NCS, Tim Dodson, was effusive about the potential of the discovery, which is now being upgraded to contain between 130 and 170 million barrels of oil. “This is a very exciting discovery which confirms that there is still a chance of finding larger volumes of oil in established areas such as Sleipner,” he said. “These are positive contributions to reaching our goal of maximising the potential on the NCS.”

This over-arching theme – maximizing the NCS’ potential – has led to a number of recent projects encompassing new technology and the implementation of research findings. More effective ways of discovering new oil and gas are fundamental to the industry, and, in recognition of that fact, StatoilHydro has worked with Landmark in the design of a new integrated interpretation and visualization tool to predict rock type and fluid variation from seismic and well data. The system claims status as a quicker, more accurate and more thorough alternative to current arrangements. The most notable advantage is arguably the potential to bring pre-stack seismic to classic workstations, making data more accessible to more staff.

StatoilHydro has also been active within the area of new recovery methods. Considering the ambitious target of 65% recovery from platform operated fields and 55% from subsea-operated fields, it is clear that the research and development of new methods must function within a demanding, results-based framework. Methods being investigated and implemented include Microbial Enhanced Oil Recovery (MEOR) in the Norne field. The technique involves using bacterial processes to mobilize oil from the pores of reservoir rocks. The simultaneous injection of water and gas – Simultaneous Water-Alternating-Gas (SWAG) method is another example.

Research and development is a high priority for StatoilHydro, with advances recorded within every imaginable area of production drilling, well-intervention, transport and refining. The environment is also a key area for StatoilHydro: most recently, plans were announced in September 2008 for floating electrification at the Gjøa platform in the North Sea. This means that Gjøa will be the first platform to get its electricity from the mainland. This will come via a cable from the new power plant at Mongstad, north of Bergen. The predicted reduction in emissions will be as much as 250,000 tonnes of carbon dioxide each year. “Electrifying new installations on the Norwegian continental shelf is one of the most important measures to reduce further carbon emissions from Norwegian oil and gas production,” said Trude Sundset, Vice President for the Environment and Climate at StatoilHydro in the report (Preparing for floating electrification, 09/09/08).

OG21 – Oil & Gas in the 21st Century
OG21, short for “Oil and Gas in the 21st Century”, is a national technology strategy task force established by the MPE in 2001 for the petroleum industry. Working in close cooperation with other projects connected to research in the industry, such as the Research Council of Norway’s Petromaks, OG21 is at the forefront of ensuring that Norway remains a world-leader in petroleum-related technology.

OG21 has, amongst its contributors, oil companies including Norway’s StatoilHydro, universities from each of the major Norwegian cities, governmental organizations including the NPD and NPE and research institutes ranging from DNV (Det Norske Veritas) to SINTEF and IFE (the Institute for Energy Technology). OG21 is, at its heart, a collaborative project.

Fundamental to OG21 has been the establishment of eight Technology Target Areas (TTA), which are the fulcrum points of research being conducted at OG21. These areas include:
• TTA1 – Environmental Technology for the Future
• TTA2 – Exploration and reservoir characterization
• TTA3 – Enhanced recovery
• TTA4 – Cost effective drilling and intervention
• TTA5 – Integrated operations and RTRM
• TTA6 – Subsea processing and transportation
• TTA7 – Deep water and subsea production technology
• TTA8 – Gas technology

Each of these areas has been handed over to contributing research institutions, organizations and companies. Successful examples of new technology have been published by the Norwegian Academy of Technological Sciences (NTVA) in cooperation with the Offshore Media Group and INTSOK (Norwegian Petroleum Technology – A Success Story). Events such as the TTA1 seminar on April 22nd at the NRC Offices in Oslo are a key part of OG21’s role as a focus for technological advantages.

“The establishment of a national strategy in petroleum-oriented technology and research, OG21 (Oil and Gas in the 21st Century), has been important as a tool for ensuring that we invest in relevant areas of R&D for the sake of the future,” said Thorhild Widvey, former Minister of Petroleum and Energy in the aforementioned book.
Investment in research, such as in national technology strategy OG21, is essential to the successful exploitation of remote areas such as the Barents Sea.
© Trim Ivar Bergsmo / StatoilHydro

ONS 2008 – the Offshore Northern Seas Foundation Exhibition, Stavanger
The unparalleled success of the recent Offshore Northern Seas exhibition is reflective of the current optimism pervading the oil and gas industries in Norway. The 34 year-old exhibition attracted the highest number of visitors in its history, with more than forty thousand, in comparison with 35,507 in 2006. This figure includes a record number of international delegations representing 28 nations, which reflects the high demand that the Norwegian industry attracts. Kjell Ursin-Smith, Chief Executive of the ONS Foundation, said of the 2008 performance, “I feel we have confirmed our position as the leading energy meeting place in Europe,” he said, “We keep getting the same message from exhibitors, conference delegates and visitors – they have experienced this year’s ONS as the best ever,” (New records set for visitors, www.ons.no).

During Terje Riis-Johansen’s opening speech at ONS, the minister drew attention to climate and the environment. “We need the same initiative and the same boldness to face today’s challenges as the petroleum pioneers proved forty years ago,” he said. “I am glad to see that the petroleum industry takes initiative to provide new answers.”

New answers was what ONS was all about, and during the four day exhibition, 1,290 exhibitors displayed solutions, new technology and new ideas to visitors. Amongst the awards at ONS 2008 was a Special Innovation Award, presented to John C. Mihm, former Engineering Manager for Phillips Petroleum in Norway, for the Ekofisk waterflood project. Other Norwegian highlights exhibited included StatoilHydro and Cubility AS’ new test centre for drilling fluids technology, a DP simulator for the first hiload offshore loading terminal, and details of Gassnova AS’ CCS (Carbon Capture and Storage) projects including the European CO2 Test Centre at Mongstad.

If Norway is to sustain the oil and gas industries well in to the next century, technology will be the key. The most successful exhibition in ONS’ history is timely proof that the whole Norwegian industry, supported by R&D initiatives that are the envy of the world, is well aware of that fact.

The Offhore Northern Seas Foundation Exhibition in Stavanger was an unparalleled success, with more than forty thousand visitors coming to witness displays of technology, solutions and ideas from across the industry.
© Harald Pettersen / StatoilHydro

Related articles

Latest articles

Ship Energy Efficiency: The Fourth Wave

Shipping has seen three waves of energy efficiency trends since 2007. The latest buzz is the Big Data revolution.

Sustainable Fish Farming Solutions: From Feed to Egg

The challenge of rising fish feed and sea lice costs is stimulating new sustainable technology solutions in Norwegian aquaculture. In the future, producers might raise salmon in egg-shaped offshore farms.

Standardization Key During Low Oil Price

The Norwegian petroleum industry is focusing on standardized solutions, inspired by Formula One and Lego, to help tackle rising field development costs.

Blue Growth for a Green Future

The Norwegian government recently launched its new maritime strategy “Blue Growth for a Green Future” aimed at keeping the country’s second largest export industry competitive and sustainable.

New Development Licenses Spur Ocean Farming

Norway has initiated free development licenses to spur new technology concepts to tackle the aquaculture industry’s acreage and environmental challenges. Many of the applicants are innovative ocean farms.

Bucking the trend: Norwegian Shelf Still Attractive

The Norwegian Continental Shelf continues to be attractive even amidst the low oil price environment. Statoil’s giant Johan Sverdrup oil field development is just the latest example.

British Showing Great Interest in “Frozen at sea”

The British are the world’s largest consumers of cod. 70 percent is used in the “fish and chips” market. Lately several Norwegian owners of trawlers have discovered the British market for the “frozen at sea” concept.

The many reasons to choose Norwegian seafood

There is an ongoing debate regarding the pros and cons of eating wild or farmed fish, or, in fact, eating seafood at all. In this article we look at the arguments for and against wild and farmed fish. Seafood is not just a...

New Ways to Enhance Oil Recovery

Norwegian companies are testing more advanced ways to enhance oil recovery, everything from converting shuttle tankers to stimulate wells and springing titanium needs inside liner holes to open up tight formations.