Krafla Concept Selection in Sight
Friday 14 July 2017
Aker BP is targeting a concept selection early next year on a new area-wide development for the Krafla-Askja and North of Alvheim discoveries off Norway in partnership with Statoil and Lotos E&P as it eyes submission of three other field development plans by year-end.
The trio are presently evaluating two alternative solutions to exploit an estimated 400 million barrels of oil equivalent in the North Sea finds encompassed by the proposed scheme - Frigg Gamma Delta, Langfjellet, Froy, Fulla and Krafla-Askja.
These are a field hub with processing platform in the middle of the area and two unmanned processing platforms - one in the Krafla-Askja area and the other in the North of Alvheim area, Aker BP disclosed in its second-quarter financial report.
It was recently reported that the three players have teamed up to find an optimal development solution for the oil and gas discoveries that would also facilitate tie-in of future finds in the area that is seen as having significant exploration upside.
Aker BP said “the project is to be further matured towards a planned concept selection” targeted for the first quarter of 2018.
“With limited infrastructure available in the area, the goal is to develop an economically robust solution which can tie in neighbouring licences and open up for new exploration upsides,” according to the Anglo-Norwegian operator.
“The area development solution is likely to include subsea structures and unmanned/normally unmanned installations on the individual reservoirs based on their size and complexity,” it stated.
The proposed project is therefore likely to attract the attention of contractors such as Kvaerner, which is touting its so-called “subsea-on-a-stick” unmanned wellhead platform solution, though the Norwegian player could face competition from Dutch rival Heerema Fabrication Group that has built a similar unit for Statoil’s Oseberg Vestflanken 2 project.
Work-starved contractors are also likely to be salivating at the prospect of three other field development plans that Aker BP aims to file with the authorities by year-end, which will trigger further contract awards.
The Oslo-listed operator said it is preparing plans for development and operation of the Valhall West Flank, Snadd and Storklakken fields at it apparently looks to capitalise on low contractor costs amid a market slump.
Valhall West Flank will be tapped using a normally unmanned facility with 12 well slots tied back to the Valhall field centre in the North Sea.
Storklakken will be developed as a standalone project with a single production well tied back to the Vilje field, utilising an existing export pipeline from the latter to the Alvheim floating production, storage and offloading vessel in the North Sea, with first oil planned n 2020.
The Snadd gas find in the Norwegian Sea will be tied into the Skarv FPSO under a phased development that is due online in 2020.
The ongoing field development work comes on the back of significantly higher second-quarter operating revenue for Aker BP fuelled by the earlier merger of Det Norske Oljeselskap with BP Norway that boosted production from fresh assets for the newly minted oil company.
The company reported a tenfold increase in quarterly net profit to $60 million, from $6 million a year earlier, as revenue more than doubled to $595 million, compared with $256 million in the same period of 2016.
Its operating profit also surged from $74 million a year ago to $210 million in the latest quarter.
"Aker BP continued to deliver solid performance in the second quarter with stable operations, efficient drilling operations and development projects progressing according to plan. The company continues to build on a strong platform for further value creation,” chief executive Karl Johnny Hersvik said.
Its output is set to be further increased by the recent start-up of the Statoil-operated Gina Krog field off Norway, in which it is a partner.
As a result, the company has increased its production guidance for this year to between 135 million and 140 million barrels of oil equivalent per day, from between 128 million and 13 million boepd, while its per-barrel production cost has also been cut from $11 to $10.