Odin preparing for Alvheim oil - Marathon on the move with development plan off Norway
Upstream, Friday June 11
By Knut Evensen
US independent Marathon is pressing ahead with its Alvheim development off Norway, with the most recent estimates putting the cost of the project at about Nkr7.6 billion ($1.14 billion).
The company said it will submit a development plan to the Norwegian government in July, and is hoping for the go-ahead later this summer.
The field has estimated reserves of 183 million barrels of oil equivalent, with 83% expected to be oil and 17% gas.
Its production profile calls for a peak output of 80,000 barrels per day in 2007, falling to 17,000 bpd in 2014.
Gas output is expected to reach 330 million cubic metres per annum 2007 before falling below 100 MMcm after 2010. Between 2022 and 2027, gas production is expected to increase again towards 700 MMcm per year.
The volume of water production is a bit more uncertain, but the operator expects about 1.6 MMcm will be lifted in 2007, increasing to 7.5 MMcm in 2013.
From this point on to 2019, water production is expected to level out at about 7.5 MMcm per year.
Meanwhile, Marathon is still evaluating reserves at the Hamsun prospect following a successful well in March/April. Final results are not expected until late this year.
The operator has recommended a subsea development for Alvheim that would be tied back to a floating production, storage and offloading vessel.
Statoil's tanker MST Odin has been earmarked for conversion for this job if the project gets the nod from Norwegian authorities.
Other alternatives that were evaluated but not pursued were subsea tie-backs to the Beryl and Bruce fields on the UK shelf.
The use of Kerr-McGee's Leadon FPSO, which is located only 14 kilometres away, was also deemed uneconomic.
Furthermore, a subsea tie-back to the UK from Norway has never been done before and there is a great deal of uncertainty over the arrangements required for a development that crosses the maritime border.
Subsea tie-backs to the Norwegian installations Jotun and Heimdal were also considered.
However, Jotun's location 26 kilometres from Alvheim, coupled with a lack of processing capacity, placed this alternative out of the frame at an early stage. Heimdal on the other hand, is located only 14 kilometres east of Alvheim, but the operator did not see any significant economic benefits in this solution.
In addition to tie-backs to existing UK and Norwegian facilities, Marathon also studied a semi-submersible and a fixed platform option.
However, both of these scenarios were based on newbuildings and a conversion of the MST Odin to an FPSO was deemed the best solution.
One advantage of using an FPSO is that oil is exported via tankers, which offers a cheaper and more flexible solution than laying a new pipeline. At peak, the operator is looking at 35 cargoes per year based on a vessel with a capacity of around 750,000 barrels.
The Sage pipeline system in the UK is the favoured transport solution for the gas under this scenario.
Marathon is planning two drilling campaigns on the Alvheim field. In total, the company is looking at two injectors and up to 15 production wells.
The two injectors, plus an initial 10 producers, will be drilled from 2005 to 2007, while an additional three to five wells are being lined up in 2008 and 2009. |
