PGNiG Upstream Norway has agreed to acquire A/S Norske Shell’s interests in Equinor-operated North Sea fields Kvitebjørn and Valemon.
Gas produced from the fields will be sent to Poland after the Baltic Pipe link is launched.
Following the transaction, PGNiG Upstream Norway (PUN) will hold all of Shell’s 6.45% interest in Kvitebjørn field as well as its 3.225% interest in Valemon field. The company also will acquire a stake in the infrastructure used to transport hydrocarbons produced from the fields. According to PUN, the deal will increase in its average daily production of oil and gas by about 30%.
Target gas output in 2020 from the fields attributable to the interests acquired from Shell represents 70% of PUN’s current production volume in Norway, resulting in an immediate increase of the company’s gas production. In 2021 production is expected to be nearly 30% above the previous forecast, having grown by almost a half compared with PUN’s gas output in 2019. According PGNiG’s estimates, in 2023–2028 (after the Baltic Pipe launch), the two fields will deliver about 0.2 bcm of gas/year to the company.
Kvitebjørn, in the northern part of the North Sea with water depth of 190 m, was discovered in 1994. Kvitebjørn produces gas and condensate from Middle Jurassic sandstone in the Brent Group. Secondary reservoirs are in the Lower Jurassic Cook formation and Upper Triassic Statfjord group. The reservoirs lie at a depth of 4,000 m and initially had high pressure and high temperature. The reservoir quality is good. The plan for development and operation (PDO) was approved in 2000. The field has been in production since 2004 using a fixed platform with fully integrated drilling modules. The extracted gas is sent via a subsea pipeline to the Kollsnes terminal, while the condensate is transported via a branch of Troll Oil Pipeline II to the Mongstad terminal.
Valemon, immediately west of Kvitebjørn in water depth of 135 m, was discovered in 1985. It produces gas and condensate from Lower Jurassic sandstone in the Cook formation and Middle Jurassic sandstone in the Brent Group. The deposit has a complex structure with many fault blocks. The reservoirs lie at a depth of 3,900-4,200 m and have high temperature and high pressure. Its PDO was approved in 2011 and production began in 2015. The field has been developed by means of a fixed platform with a simplified hydrocarbon separation process, operated remotely from land. Its condensate and gas output is carried via a pipeline to Kvitebjørn field, and then via a subsea pipeline to the Mongstad processing terminal.
The deal is subject to approval by Norwegian petroleum and tax authorities.