Mature commitment

"This is why we regard Snorre as so important – because of the big assets it represents for Norwegian society"

The oil production curve on the NCS has been declining since its peak in 2000-01. A key instrument for slowing a further fall – and maintaining output at the highest possible level – is to improve recovery from producing fields. That was identified in the petroleum White Paper approved by the Storting (parliament) during 2012. Snorre in the North Sea provides a prime example today.

It ranks as the producing field on the NCS with the second-largest volume of remaining oil. Only Ekofisk further south has more. The operator and licensees have calculated that 250 million extra barrels of oil can be recovered from Snorre – if a new platform is built and installed mid-field. That is more than the oil output we expect from the Goliat development in the Barents Sea.

This is why we regard Snorre as so important – because of the big assets it represents for Norwegian society.

The field is one of several which offer big opportunities for improved oil recovery. Along with Snorre and other reservoirs with large remaining reserves, we also give priority to strategically important smaller fields where a big commitment can create great value for both society – and the companies.

This job is demanding. Maintaining planned production is a challenge on a number of fields. At the same time, we ask the companies to look at opportunities for getting out more oil than originally expected.

Our operating budget has been increased by NOK 10 million in the government’s 2014 budget. This money is earmarked for helping to improve oil recovery from mature fields on the NCS. We aim to accept this challenge and to follow up the companies so that they do their job properly and keep fields going until all commercial resources have been produced.

Why do government and companies have differing views on which investments are positive when a field is mature? One answer is that companies usually have tougher requirements for the rate of return than the Norwegian state.

Moreover, action – capital spending – is required to boost recovery factors. Competition within companies over investment funds is high. Measures to improve recovery must accordingly compete with new developments, both on the NCS and internationally.

A final go-ahead for investing in a new platform on Snorre has yet to be given. Such a facility is required because the two existing installations lack the capacity and producing life to drill the necessary wells. Moreover, a substantial proportion of the remaining oil lies beyond their reach.

While waiting for a decision, it could be useful to take a look back. Our efforts to improve oil recovery from fields have helped to generate billions of kroner in additional revenues for the Norwegian government.

We like to make particular mention to the commitment to extend producing life on Ekofisk and Troll. Where the latter is concerned, these efforts are said to have boosted oil recovery by 2.5 billion barrels. The goal now is to add Snorre to this list.

Today’s project has been dubbed Snorre 2040 – a reminder that recovering all commercial resources in a field calls for longterm work. Snorre was discovered in 1979, and came on stream 13 years later. A decision on investment and development concept is due in 2015. It should be worthy of the Snorre 2040 designation.

Bente Nyland
director general