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No luck for Shell in pioneer effort offshore Norway

Daniel J. Graeber: AUG. 8, 2018

Aug. 8 (UPI) — A division of Shell came up empty-handed when drilling into a frontier prospect in the Norwegian Sea, a national petroleum regulator announced Wednesday.

The Norwegian Petroleum Directorate, the nation’s energy regulator, reported that the regional subsidiary of the Dutch supermajor drilled a dry hole in its first effort in a wildcat area near the Ormen Lange field in the Norwegian Sea.

A wildcat well is one drilled into an area not previously known to contain hydrocarbons. The NPD said the drilling facility used in the effort will now move to another license area in the Norwegian Sea where a regional division of French supermajor Total will try its hand with a wildcat well.

Norwegian production trends are important because the country is one of the main suppliers of oil and natural gas to the European market, apart from Russia. For Norway, oil and gas operations represented about 14 percent of the nation’s gross domestic product and 40 percent of its export value last year.

In its annual forecast, the NPD found that just under half of all the expected resources on the continental shelf are in discoveries yet to be made. The regulator’s surveys resulted in an increase in the estimate of undiscovered resources from 18.2 billion to 25.2 billion barrels of oil equivalent.

Most of those undiscovered reserves are thought to be in the Barents Sea, with half of that in areas yet to be opened in the far north reaches of those waters.

The forecast, however, finds oil and gas production starts to decline gradually beyond 2025. If production levels are to continue at current rates of around 1.6 million barrels of oil equivalent per day, more production and proven discoveries are necessary.

For June, the last full month for which data are available, the NPD reported a decline in total production. Oil output was 3 percent lower than forecast for June and 4 percent below the forecast for the year.

The NPD put the reserve estimate from a July discovery at a wildcat well drilled by Wellesley Petroleum in the Norwegian waters of the North Sea between 1.8 million and 8.1 million barrels of oil.

SOURCE

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