Prospects for growth in North Sea production this year are fading fast
Petroleum Intelligence Weekly, June 14
North Sea Production Struggles To Grow
By Ronan Kavanagh in London
Prospects for growth in North Sea production this year are
fading fast, with UK and Norwegian oil output through May
already lagging last year's levels. At play is a combination
of delayed new field start-ups, faster-than-expected
decline rates at some older fields, and a series of technical
problems resulting in unplanned shut-ins. This North Sea
cocktail is expected to cap combined UK and Norwegian
output at an average 5.57-million barrels a day in full-1999,
just 44,000 b/d higher than last year, according to EIG
estimates. On the other hand, combined production is
expected to scrape above the 6-million b/d mark by the end
of this year, compared with 5.76-million b/d at end-1998.
After an early peak of 5.62-million b/d in the first quarter of
this year, UK and Norwegian output is expected to dip to
5.37-million b/d in the second quarter and 5.35-million b/d
in the third quarter, owing to extensive summer platform
maintenance. Output is expected to reach its nadir in June,
dipping below the 5-million b/d mark, but should then
rebound to just over 5.4-million b/d by August. After a
second maintenance-related dip in September, the return of
most platforms to normal operations and growing
contributions from new fields should lift combined output to
5.95-million b/d in the fourth quarter.
Although average UK output is still expected to rise by
almost 80,000 b/d this year, this expansion is not spread
evenly among the major crude oil streams. While fields using
offshore tanker loading are growing strongly, a steady
decline is likely in Brent/Ninian and, to a lesser extent,
Flotta flows. The notable exception to the trend is BP
Amoco's Forties system, where production is expected to
rise by nearly 9% to 940,000 b/d this year, on the back of
rising contributions from new fields tied in late last year.
Summer Dip
The low point for UK production will come in June, when
most offshore maintenance is planned. But with work
programs also spread across July and August, production
won't really begin to bounce back until September. Work in
the UK is planned at Royal Dutch/Shell's Brent fields for
around two weeks in June, and then another week in
August. June work is also planned at other fields in the
Brent system, including Shell's Auk and Cormorant, and
Oryx's Hutton and Murchison. A further bunch of
maintenance there is scheduled for September and, later,
at the Dunlin, Osprey, Tern, and Eider fields. Summer
maintenance is also planned at BP Amoco's Forties system
and associated fields including Andrew/Cyrus, Brae, Nelson,
and Scott. The Elf Aquitaine/Enterprise-operated Flotta
system will see June work at the Piper and Saltire fields,
while offshore loading fields have maintenance scheduled
throughout the summer season.
The UK has experienced its share of operational problems so
far this year, with production suspended at BHP's Liverpool
Bay complex for almost all of April due to technical
problems. Amerada Hess was also forced to take its Fife,
Fergus, and Flora fields off-line at the end of April for an
estimated three months of repairs to its production vessel.
Prospects remain for further unplanned outages, as it will
take time for the recovery in oil prices to translate into
extra funds for pared-back operating budgets.
A series of new field start-ups should help boost UK
production in the second half of the year, as output levels
build up. These include Enterprise's 45,000 b/d Pierce,
Kerr-McGee's 55,000 b/d Janice, and Conoco's 60,000 b/d
Banff fields, all of which started up in the first quarter.
Apart from a few small field start-ups expected over the
course of the year, the next big project coming on stream
is Amerada Hess's 83,000 b/d Bittern/Guillimot, in the fourth
quarter.
Norwegian production should peak at just under 3.2-million
b/d in the fourth quarter, thanks largely to contributions
from fields that have already started up. These include
Statoil's massive 227,000 b/d Asgard field and Norsk Hydro's
100,000 b/d Visund. They will be followed by Exxon's 80,000
b/d Jotun and Hydro's 100,000 b/d Troll C fields, both of
which are expected on stream by the fourth quarter.
Norway's maturing crude oil streams are also feeling the
pressure, with national production likely to fall short of
official targets this year, and apparently on track for its
second annual decline in a row. This means Norwegian
producers are unlikely to have to turn down the taps to
honor Oslo's commitment to cut output, to help Opec and
other producers support oil prices.
Including these production cuts, Norway has set a new
target of 3-million b/d for 1999. This excludes condensate
production, which is expected to average around 210,000
b/d this year. But according to EIG estimates, crude oil
output, excluding condensate, will come in as low as
2.77-million b/d this year.
Although satellite developments should help boost Gullfaks
production by 18,000 b/d to an average 430,000 b/d this
year, output from other streams is falling. Statfjord flows
look set to fall by nearly 16% to 560,000 b/d, although this
is due partly to a series of technical problems with
production facilities, not just its aging reservoirs. Similarly,
operational problems have held back Ekofisk production,
despite an extensive revamp of facilities that was
completed last year. Oseberg flows should rebound from
maintenance this quarter, but are still lagging last year.
Platform maintenance in Norway is scheduled at Oseberg
and Brage for 12 days in June, and at Njord for four days in
July. Gullfaks will witness partial shutdowns for two weeks
in September, and another two weeks in October, along
with the Tordis field. Initial maintenance took place at
Statfjord in late May and early June, and will be followed by
a further two weeks of work from late August. Partial
shutdowns at the Sleipner condensate field are planned for
two weeks from the end of this month, and again in late
August. |
