Norway is obviously keen to export as much gas to Europe as possible. But exploration results do not offer much relief for the medium term.
True, Aker BP proved up to 11 Bcm of gas (68 MMboe) in the Norwegian Sea through completing the Storjo East well recently. However, when looking at the wells drilled on the Norwegian Continental Shelf (NCS) this year, the overall results are certainly not worth a feast.
Ormen Lange Deep, Cambozola, Laushornet, all prospects that were drilled this year and that could have added healthy volumes. Especially in the case of Ormen Lange Deep, operated by Shell, the discovery of additional volumes would have been straightforward to develop because the target was situated below the producing Ormen Lange field. However, despite high hopes and anticipation, none of these wells came in as a discovery.
Out of 18 genuine exploration wells completed on the NCS this year, 11 were dry and seven resulted in a find. At first glance, not too bad a result, but adding up the preliminary volumes – between 111 and 223 MMboe combined, the result can only be seen as disappointing. For instance, last year’s result was between 370 and 740 MMboe for the whole year.
An example of a discovery that can barely be classified as such is the Peder 6507/4-3 well drilled by ConocoPhillips in the Norwegian Sea, where a tiny gas accumulation of around 0.7 MMboe was proven. It is unlikely that such a volume will ever be considered for development.
Reason to be cautious
To this can be added that even though volumes may sometimes be looking good, it depends very much on the deliverability of the reservoirs whether extraction is worthwhile. For instance, when reading the press release on the Storjo well, it becomes clear that the three Jurassic reservoirs hosting most of the discovered gas are all interpreted as having poor reservoir quality. It Is therefore no surprise to see that appraisal is needed before any decision on development can be made.
On top of that, it is known that especially for smaller discoveries (<100 MMboe), the initial size of the pool often tends to be larger than it turns out to be once production commences or further appraisal is carried out. The recent Slagugle appraisal campaign is a recent example of a significant downgrade in volumes once a second well is drilled.
At the same time, there are currently five exploration wells being drilled on the NCS, so there are opportunities to beef up the volumes discovered so far this year.
HENK KOMBRINK
