Friday 8 September 2017

Statoil has decided to use a subsea production system instead of an unmanned wellhead platform as part of its 220,000 barrels of oil equivalent per day Johan Sverdrup phase two project off Norway.

Kjetel Digre, Statoil's Johan Sverdrup project director, stated this decision to go the subsea route to exploit the Avaldsnes part of the giant field was made at the end of August.

It has come as something of a surprise because as recently as June the operator favoured an unmanned wellhead platform solution for Avaldsnes.

Digre said increased knowledge of the reservoir, cost improvements in the subsea supply chain, a favourable rig market and improved drilling practices were among the factors influencing Statoil to opt for subsea wells.

In what will be a boon to work-hungry subsea contractors, Johan Sverdrup's phase two project will now comprise a 20-well subsea development. The project will include five subsea templates, with half of the wells being water injectors and the remainder being producers.

As well as Avaldsnes, this 20-well production system will also tap the Geitungen and Kvitsoy parts of the Johan Sverdrup field, which have always been earmarked for exploition via wet trees rather than dry trees.

In addition, the phase two project calls for a further 10 development wells to be drilled from an existing Johan Sverdrup phase one drilling platform.

It is unclear whether Statoil has made a decision on what type of contracting strategy to adopt for the subsea production system, plus associated flowlines and umbilicals.

Aibel and Wood Group are currently carrying out front-end engineering and design studies on the subsea complex.

Digre said Statoil and its partners have also decided to use a semi-submersible rig for development drilling duties because difficult seabed conditions make it challenging to use jack-ups.

In addition, the market for semi-submersibles is preferable for the time being.

Production from the 30 new wells will be fed to a new processing platform with a capacity of 220,000 boepd.

This facility is still smaller than Johan Sverdrup's phase one processing platform, which has a capacity of 440,000 boepd.

Nevertheless, the phase two topsides will still weigh a massive 21,500 tonnes - compared to the 26,500-tonne weight of the phase one process platform deck - and includes a high voltage, direct current module to receive power from shore as well as a seawater desalination module for water injection purposes.

Asian yards are already positioning themselves for the phase two topsides bid process, with the size of the platform favouring Korean yards like Samsung Heavy Industries - currently building the phase one integrated deck - and Hyundai Heavy Industries.

Norwegian yards do not have capacity to handle integrated decks so will be reliant on Statoil taking a modular approach to construction work.

According to Arne Sigve Nylund, the head of Statoil's Norway development & production business, the deck design will allow for both construction methods.

Aibel’s chief executive Mads Andersen stated that winning topsides work from Johan Sverdrup phase two as well as contracts on Statoil's Johan Castberg project in the Barents Sea, is critical to the future of Norwegian fabrication yards.

“It is crucial for Norwegian yards to win these contracts,” he said.

Kvaerner, Aibel's rival contractor, is chasing Johan Sverdrup's phase two topsides work.

Also, it is currently conducting FEED work on the phase two processing platform's jacket and is widely regarded as favourite to win the jacket fabrication contract.

Statoil intends to use the Pioneering Spirit offshore construction vessel to install both processing platform decks.

Statoil’s Digre said that a formal bid process for the phase two platform had not yet started but that the project partners are in close dialogue with all contractors currently involved in Johan Sverdrup phase one.

"They are delivering very well and all are qualified for more work for phase two," he said.

However, he added that other contractors are also in talks with Statoil about participating in the project, including Hyundai.

A final investment decision and major contract awards for Johan Sverdrup phase two are planned for the third quarter of 2018, compared to the originally sanction timing of late 2017.

The first phase of development is anticipated to come online in late 2019 with a production capacity of about 440,000 barrels of oil per day.

The second phase is expected to bring total production capacity to 660,000 boepd when it comes online in 2022.

Johan Sverdrup is estimated to hold between 2 billion and 3 billion barrels of oil equivalent of recoverable resources.

Statoil operates the North Sea development with a 40.0267% interest.

It is partnered by Lundin Petroleum with a 22.6% interest, Maersk Oil - which is currently being acquired by Total - on 8.44%, Petoro on 17.36% and Aker BP holding 11.5733%.Statoil has decided to use a subsea production system instead of an unmanned wellhead platform as part of its 220,000 barrels of oil equivalent per day Johan Sverdrup phase two project off Norway.

Kjetel Digre, Statoil's Johan Sverdrup project director, stated this decision to go the subsea route to exploit the Avaldsnes part of the giant field was made at the end of August.

It has come as something of a surprise because as recently as June the operator favoured an unmanned wellhead platform solution for Avaldsnes.

Digre said increased knowledge of the reservoir, cost improvements in the subsea supply chain, a favourable rig market and improved drilling practices were among the factors influencing Statoil to opt for subsea wells.

In what will be a boon to work-hungry subsea contractors, Johan Sverdrup's phase two project will now comprise a 20-well subsea development. The project will include five subsea templates, with half of the wells being water injectors and the remainder being producers.

As well as Avaldsnes, this 20-well production system will also tap the Geitungen and Kvitsoy parts of the Johan Sverdrup field, which have always been earmarked for exploition via wet trees rather than dry trees.

In addition, the phase two project calls for a further 10 development wells to be drilled from an existing Johan Sverdrup phase one drilling platform.

It is unclear whether Statoil has made a decision on what type of contracting strategy to adopt for the subsea production system, plus associated flowlines and umbilicals.

Aibel and Wood Group are currently carrying out front-end engineering and design studies on the subsea complex.

Digre said Statoil and its partners have also decided to use a semi-submersible rig for development drilling duties because difficult seabed conditions make it challenging to use jack-ups.

In addition, the market for semi-submersibles is preferable for the time being.

Production from the 30 new wells will be fed to a new processing platform with a capacity of 220,000 boepd.

This facility is still smaller than Johan Sverdrup's phase one processing platform, which has a capacity of 440,000 boepd.

Nevertheless, the phase two topsides will still weigh a massive 21,500 tonnes - compared to the 26,500-tonne weight of the phase one process platform deck - and includes a high voltage, direct current module to receive power from shore as well as a seawater desalination module for water injection purposes.

Asian yards are already positioning themselves for the phase two topsides bid process, with the size of the platform favouring Korean yards like Samsung Heavy Industries - currently building the phase one integrated deck - and Hyundai Heavy Industries.

Norwegian yards do not have capacity to handle integrated decks so will be reliant on Statoil taking a modular approach to construction work.

According to Arne Sigve Nylund, the head of Statoil's Norway development & production business, the deck design will allow for both construction methods.

Aibel’s chief executive Mads Andersen stated that winning topsides work from Johan Sverdrup phase two as well as contracts on Statoil's Johan Castberg project in the Barents Sea, is critical to the future of Norwegian fabrication yards.

“It is crucial for Norwegian yards to win these contracts,” he said.

Kvaerner, Aibel's rival contractor, is chasing Johan Sverdrup's phase two topsides work.

Also, it is currently conducting FEED work on the phase two processing platform's jacket and is widely regarded as favourite to win the jacket fabrication contract.

Statoil intends to use the Pioneering Spirit offshore construction vessel to install both processing platform decks.

Statoil’s Digre said that a formal bid process for the phase two platform had not yet started but that the project partners are in close dialogue with all contractors currently involved in Johan Sverdrup phase one.

"They are delivering very well and all are qualified for more work for phase two," he said.

However, he added that other contractors are also in talks with Statoil about participating in the project, including Hyundai.

A final investment decision and major contract awards for Johan Sverdrup phase two are planned for the third quarter of 2018, compared to the originally sanction timing of late 2017.

The first phase of development is anticipated to come online in late 2019 with a production capacity of about 440,000 barrels of oil per day.

The second phase is expected to bring total production capacity to 660,000 boepd when it comes online in 2022.

Johan Sverdrup is estimated to hold between 2 billion and 3 billion barrels of oil equivalent of recoverable resources.

Statoil operates the North Sea development with a 40.0267% interest.

It is partnered by Lundin Petroleum with a 22.6% interest, Maersk Oil - which is currently being acquired by Total - on 8.44%, Petoro on 17.36% and Aker BP holding 11.5733%.