Statoil plans to drill about 30 exploration wells in 2017, up about 30% compared to 2016, on the back of better market conditions and improvements the company said it has made.

Between 16 and 18 of the planned wells will be drilled on the Norwegian Continental Shelf (NCS), the operator said. Of these, five to seven are planned for the Barents Sea, with the rest spread between the Norwegian Sea and North Sea. This campaign already is paying dividends as the Cape Vulture probe was revealed as a new oil discovery Jan. 17. In 2016 Statoil completed 23 exploration wells as operator and partner—14 of them on the NCS.

“Taking advantage of our own improvements and changed market conditions, we have been able to get more wells, more acreage and more seismic data for our exploration investments in later years,” said Tim Dodson, Statoil’s executive vice president for exploration.

Renewed confidence

Statoil was one of the first operators to cut back spending in 2014 before the industry’s downturn really kicked in that year. The slump in oil price and resultant massive wave of investment cuts forced the industry to evolve from a high-spend culture to one based firmly on cost control, efficiency and, in the North Sea especially, one where collaboration is the norm and not the exception.

Statoil certainly has been able to slash the cost of its subsea development projects since the crash due to contractor bids coming down by about 30% to 40% in many cases. When combined with its “own improvements,” fields that were borderline marginal are now worth pursuing even if the oil price remains about $55/bbl, although most forecasts suggest this price will climb a little this year and next. Given Statoil’s ability to adapt to the new industry reality, the company clearly feels the time is right to start spinning the drillbit and hunt for new reserves that can be fast-tracked into development.

This view is backed up by the government, which said it must continue to provide operators with new opportunities to explore for oil and gas.

“I will be on the offensive when it comes to awarding new acreage to ensure the continued development of this industry,” Terje Soeviknes, Norway’s new minister of petroleum and energy, said in January.

Near-field success continues

Looking for hydrocarbons near existing field projects— which enables subsea tiebacks to nearby infrastructure— has been a successful strategy for Statoil, and the company intends to mix this strategy with exploring new areas during 2017.

“Exploring new acreage and near-field exploration is important to add new and profitable volumes to our NCS production. Today’s Cape Vulture find 6 km (3.7 miles) from the Norne Field is an example of this,” Statoil told Subsea Engineering News Jan. 17. “Maturing and identifying new targets near existing fields/infrastructure is part of our exploration scope in 2017 as well. Our exploration program this year is a mix of frontier exploration (Barents Sea southeast) combined with near-field exploration in mature basins.”

In terms of Statoil’s improvements, the operator told Subsea Engineering News that “planning for utilization of existing capacity and infrastructure near developed fields in operation reduces costs significantly and allows resources to be planned for development, such as the Byrding prospect near the Troll Field and Utgard near the Sleipner Field, both in the Norwegian North Sea. A key factor is simplification of concepts and strong collaboration across the industry, with operators and suppliers working together.

“Gina Krog is expected onstream during summer this year, Aasta Hansteen in 2018 and Johan Sverdrup in 2019 as scheduled,” Statoil added in reference to ongoing field development projects.

Statoil began drilling the Cape Vulture exploration well in December 2016. (Source: Statoil)

Buoyed as Cape Vulture soars

Statoil’s 2017 drilling plans were boosted recently as the partners in Production License 128 (PL 128) made an oil discovery with wildcat well 6608/10-17 S on the Cape Vulture prospect in the Norwegian North Sea.

The well was drilled about 5 km (3 miles) northwest of the Norne Field in the northern part of the Norwegian Sea and about 200 km (124 miles) west of Sandnessjøen. Statoil is the operator of PL 128 with a 63.95% stake, while Petoro holds 24.55% and Eni has 11.5%.

A preliminary estimate of the size of the discovery ranges from 70 MMbbl to 200 MMbbl of oil in place, with a further additional potential to be evaluated. The well will be permanently plugged and abandoned after extensive data collection and sampling.

Eni said the discovery is in line with its “near-field strategy that, in case of success, allows a fast exploitation of reserves thanks to the synergies with existing nearby infrastructures.”

The Norwegian Petroleum Directorate added, “The licensees will consider further delineation of the discovery with regard to a potential development via the Norne [FPSO] vessel.”

Statoil’s near-field strategy was given further credence Jan. 17 when a plan for development and operation (PDO) for each of its Utgard and Byrding fields in the Norwegian North Sea were approved by the government. Utgard is a gas and condensate field that straddles the NCS and the U.K. Continental Shelf. Byrding is an oil and gas field that lies north of the Troll Field.

“These projects will give valuable new volumes to the Sleipner and Troll fields,” said Torger Rød, senior vice president for project development at Statoil, in a company statement. “Efficient utilization of existing infrastructure contributes to reducing the costs and makes these developments profitable.”

Capex for Utgard is estimated at about $414.1 million, while capex for Byrding is estimated to near $118.3 million. Utgard’s recoverable reserves are estimated at 56 MMboe. Utgard was discovered in 1982 and is located 21 km (13 miles) from the Sleipner Field.

The Utgard PDO includes “two wells in a standard subsea concept, with one drilling target on each side of the median line. The installations and infrastructure will be located in the Norwegian sector,” Statoil added. Utgard is scheduled to come onstream in fourth-quarter 2019. Utgard partners are operator Statoil (38,44%), Statoil UK (38%), Lotos Exploration and Production Norge (17.36%) and Kufpec Norway (6.2%).

Byrding’s recoverable volumes are estimated at about 11 MMboe. The Byrding PDO includes a dual-lateral well drilled from the existing Fram H-Nord subsea template through which oil and gas from Byrding will flow to Troll C. Byrding is scheduled to come onstream in third-quarter 2017. Byrding partners are operator Statoil (70%), Engie E&P Norway (15%) and Idemitsu Petroleum Norway (15%).

Editor’s Note: This article first appeared in Subsea Engineering News in January 2017. To subscribe to the newsletter, visit