NORWAY'S EFFICIENT DRILLING
NPD wrote, the price tag for developing a field on the Norwegian shelf has declined by an average of more than 40 per cent since the autumn of 2014, according to the NPD's analysis of eight planned developments that are approaching start-up.
The decline is a result of a combination of simpler development concepts and more efficient drilling. Lower prices for work and equipment are also a contributing factor.
The investment estimates for the Utgard, Oda, Zidane, Trestakk, Snilehorn, Johan Castberg, Snorre Expansion and Johan Sverdrup Phase 2 projects have fallen from about NOK 270 to 150 billion, according to the operating companies' own calculations. The downward adjustments have been made in connection with various decision phases in project implementation.
"This is a significant and very welcome reduction", says the NPD's Director of development and operations, Ingrid Sølvberg.
"The oil companies and the supplier industry have made a tremendous effort in streamlining the activities, and now we can see that these measures are working."
The biggest savings on these eight projects are a result of altered development solutions. The second largest reduction is within drilling and wells, which on average accounts for around 30 per cent of the overall field development costs. This is due to the decline in rental rates for drilling rigs, and also that the companies are planning wells that can be drilled faster. The actual drilling operation has also become more efficient, so that the price per metre of well will be much lower than before.
Investments in pipelines and cables are also expected to decline significantly. This is a result of falling prices for materials, and choosing different routes. Simplified development solutions and less costly materials will yield more reasonably priced modifications and adaptations of facilities where the oil and gas from new developments will be taken in and processed.
Despite the positive development in the cost scenario, Sølvberg cautions against short-term savings at the expense of long-term value creation on the shelf. She also warns against cutting staff in important technical environments, as it could impair the capacity for innovation and the ability to find smart solutions.
The NPD has noted tendencies where companies prioritise minimum investment in the development phase, but that could limit subsequent upgrades of the facilities, or make them more expensive.
"We must not put ourselves in a situation where cost cuts reduce the future flexibility on the fields, or have a detrimental impact on our ability and willingness to use technology that can provide better and more efficient resource management," says the development director.
|March, 16, 10:40:00|
|March, 16, 10:35:00|
|March, 16, 10:30:00|
|March, 16, 10:25:00|
|March, 16, 10:20:00|
|March, 16, 10:15:00|
BLOOMBERG - While Europe as a whole gets more than a third of its gas from Russia, that share is lower in the U.K., which receives the bulk of its fuel from North Sea fields and Norway. Still, Moscow-based Gazprom PJSC was the second-biggest supplier to major industrial consumers in the U.K. last year, according to Britain’s energy regulator Ofgem.
FT - of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.
REUTERS - So far this year, two Yamal cargoes unloaded at British terminals for domestic consumption, accounting for about a third of Britain’s 2018 LNG imports after typical supplier Qatar pre-sold the bulk of its winter output to Asia last year.
REUTERS - U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement. Brent crude futures LCOc1 were at $64.62 per barrel, down just 2 cents from their last close.