Statoil submits plans to UK and Norwegian Government for new North Sea development

Statoil's North Sea Utgard discovery
Statoil's North Sea Utgard discovery

Statoil and its partners have submitted the plan for development and operation (PDO) and a field development plan (FDP) for the Utgard gas and condensate discovery in the North Sea to Norwegian and UK authorities.

The move by the Norwegian operator comes after it acquired JX Nippon’s 45% share in the field in June.

The Utgard discovery was made in 1982, 21 kilometres from the Sleipner field.

Torger Rod, Statoil’s senior vice president for project development, said: “I am very pleased that we can now realise a commercial development of Utgard. This clearly demonstrates the effects of the improvements work that has taken place in the oil and gas industry in recent years.

“Utgard is the first Statoil development in many years producing resources across the median line, and we are pleased to have found good solutions that address considerations for good resource management on both sides.

“Good and efficient cooperation across the board, both in relation to partners and government authorities, has made this development possible.”

Chris Andrews, vice president for asset management for Statoil Aberdeen, said the investment decision was a brave marker for today’s current climate.

“We are very pleased to have delivered the FDP for Utgard to the OGA,” he said.

“It is no easy feat to make new investment decisions in the current market situation. New field developments in the North Sea have been few and far between. Utgard was discovered already in 1982, and has been considered for development several times, without success. The realisation of Utgard at this point in time is a result of the improvement effort in Statoil and the industry, and a holistic approach to utilisation of existing infrastructure.

“It is also an example of how collaboration between companies and authorities on both sides of the median line helps maximise the economic recovery of resources in the North Sea.”

Utgard straddles the UK-Norway median line with the majority of the reserves being located on the Norwegian side.

Its recoverable resources are estimated to be 56.4 million barrels of oil equivalent (BOE).

Statoil UK has made three strategic transactions to take over as 100% owner and operator on the UK side.

The Utgard development is expected to include to wells in a standard subsea concept with one drilling target on each side of the median line.

All installations and infrastructure being located in the Norwegian sector, the UK well will be drilled from the subsea template on the Norwegian continental shelf. The distance from the subsea template to the median line is 450 metres.

Gas and condensate will be piped through a new pipeline to the Sleipner field for processing and further transportation to the market.

The Utgard gas has a high CO2 content, and will benefit from carbon cleaning and storage at Sleipner.

Reuse of existing infrastructure is essential to the development of the Utgard discovery.

The Utgard wells are scheduled to come on stream at the end of 2019 In the plateau phase the field will produce approximately some 7,000 Sm3 per day of oil equivalent.

Production is expected to start in at the end of 2019.