Krafla and North of Alvheim Plans Taking Shape
Thursday 8 June 2017
A new standalone oil and gas development to exploit more than 400 million barrels of oil in the Krafla and North of Alvheim area is beginning to take shape in the Norwegian the North Sea.
Operators Aker BP and Statoil, together with their partners, have begun joint work to find an optimal development solution for a series of oil and gas discoveries west of Bergen where proven reserves have already passed the 400 million barrels of oil equivalent mark, and the upside potential is described as significant.
Aker BP, which operates the undeveloped North of Alvheim area, encompassing the Frigg Gamma Delta and Langfjellet discoveries and the abandoned Froy field, believes an area-wide solution makes sense.
A company spokesman stated that Aker BP and other operators and partners in the play, aim to arrive at an optimal technical and economical solution to develop the discoveries.
“Preliminary studies suggest that an area-wide solution will be more robust and economically attractive than individual developments within the different licences. Such a solution will also make a solid foundation for further exploration.”
He added that it is Aker BP’s impression that other operators share this view.
Water depths in the area are between 100 and 200 metres, which suggest a fixed platform could serve as a hub for a new development with unmanned wellhead platforms and subsea structures to be installed at the various satellite fields, depending on their size and complexity.
Aker BP’s spokesman said ongoing work to find an optimal hub solution will continue through this year but stressed it is too early to say where a hub should be located and what development concept should be pursued.
Some industry sources suggested Aker BP’s 75-million boe Frigg Gamma Delta discovery might be a logical choice because it is centrally located between the Langfjellet discovery, holding 49 million boe of resources, and the Froy field with 60 million boe.
Total’s Lille Froy, holding 27 million boe is located to the south, as is Statoil’s Krafla-Askja, which hosts a much larger 260 million boe of reserves.
However, Statoil is seen as unlikely to want to hand over operatorship as it holds such a large chunk of the area's proven reserves. A Statoil spokesman said it is too early to comment on possible development concepts but he did confirm that “several studies for the Krafla and North of Alvheim area are ongoing and that possible area solutions are being evaluated".
He agreed that more would be known once the studies are finished early next year.
Norwegian authorities are monitoring the ongoing work, and it is understood that the Ministry of Petroleum & Energy has reminded all parties that they are obliged by law to find an optimal development solution for the resources.
The country's regulator, the Norwegian Petroleum Directorate, did not want to discuss the ongoing studies but a spokesman did say that the NPD is concerned that the companies consider the area as a whole, and not just their own fields in isolation.
“This is an area with potentially large resources and the directorate is following the companies’ plans closely, asking them to study all possibilities and challenging them before milestones are reached," he said, adding that the NPD "is in close dialogue with the companies with a goal of maximising value creation."