Drilling activity off northern Europe is climbing to record levels.
The number of offshore rigs available in the region has increased to 130; only six are stacked.
The midsummer 1990 figures show a considerable increase in drilling compared with the same period of 1989, when the region's rig count totaled 122 available units with 12 stacked.
The U.K. sector remains busiest. At midsummer it accounted for 61 of 92 wells in progress off northern Europe. British sector operators were drilling 30 exploratory, 8 appraisal, and 23 development wells.
The midsummer 1989 rig count showed 50 wells in progress off the U.K.
Companies expect this year's high level of activity to continue into 1991 and 1992 as new acreage becomes available.
Netherlands holds the number two drilling spot. Although the mature areas of the Dutch offshore have been well explored, new licenses have been awarded in areas previously either seen as less prospective or subject to government restrictions on drilling.
Fourteen rigs recently were active in Dutch waters, eight involved in exploration work and six on development drilling.
Although overall drilling has increased in Norwegian waters in the last 12 months, authorities are concerned about the continued depressed state of exploration.
At midsummer there were 11 rigs in Norwegian waters-five on wildcats, three on appraisal holes, and three on development wells. At the same time last year, 10 rigs were working off Norway, seven on wildcat and appraisal wells and three on development holes.
Drilling programs in Norway initially suffered from exploration budget cuts. But exploration companies now complain about a lack of drillable prospects.
The situation off Denmark is unchanged from a year ago.
Five rigs are on charter in the Danish sector-four working on development and one on exploration.
Ireland has two active offshore rigs and hopes that the general surge in oil company enthusiasm for its waters will sustain a new drilling effort. There is no drilling off West Germany or France.
U.K. BOOMING
Britain's Department of Energy (DOE) plans to extend the high level of drilling in mature areas of the North Sea into frontier areas of the deep Atlantic north and west of the Shetland Islands.
Limited drilling has occurred in these hostile, remote waters. Much of what has occurred has been on blocks licensed as part of a trade-off for more-attractive acreage in the North Sea.
This time, DOE hopes to persuade companies to invest in high risk exploration through a frontier licensing round with terms more favorable than those in mature areas.
The new terms include a large number of blocks in each license and the ability of operators to surrender any license after completing a seismic program. A total of 117 blocks in 11 licenses will be on offer with relinquishment based on the number of wells drilled in the first phase of the license.
The frontier round will run in parallel to Britain's 12th licensing round, which will cover 120 blocks in the North Sea, Irish Sea, English Channel, and Caernavon basin off Wales.
Blocks from both rounds will be awarded next year. Industry sources say the new acreage should preclude drilling cuts attributable to lack of attractive prospects.
Ahead of the government announcement of a separate frontier licensing round, six interest holders in the Clair heavy oil structure in the Atlantic west of the Shetlands agreed to run a 3D seismic survey this summer and to further evaluate the field.
Clair, thought to have 3 billion bbl of oil in place, is one of the most challenging prospects in U.K. waters. The low permeability reservoir is shallow and highly faulted.
British Petroleum Co. plc will chair a steering committee coordinating the work, which started earlier this summer with a 3 month 3-D survey by the Geco Beta seismic ship. Esso U.K. Exploration & Production will lead on reservoir studies, and Elf U.K. Ltd. on engineering studies. The project could lead to further appraisal drilling.
SUCCESSES GROW
Successes have increased with drilling. In 1989, there were 29 significant discoveries in U.K. waters; in the first 6 months of this year there were 16 finds.
Activity in the Southern basin of the U.K. North Sea has been unaffected by minor delays producers have encountered in signing new gas supply contracts with British Gas plc. Small accumulations remain attractive as the source of supply for direct sales by a new generation of gas companies that has sprung up in the last 12 months.
The more northerly and less intensively explored Carboniferous zones in the Southern basin continue to produce new finds and maintain oil company interest. Smaller discoveries in the mature Rotliegendes sands are also being made.
Conoco (U.K.) Ltd. made a series of finds in Quadrant 44 close to the Dutch median line. It expects to develop Murdoch gas field.
Interest has revived in the Irish Sea. After a couple of indifferent drilling years, two significant discoveries have been made.
British Gas tested 89.9 MMcfd from a structure immediately west of its Morecambe South field, while Hamilton Bros. Oil & Gas tested 70 MMcfd from Block 110/13 to the south.
In the oil province, drilling is widespread. With prospects close to existing infrastructure, however, the effort attracts ample funding.
Conoco is evaluating a small prospect near Sun Oil Great Britain Ltd.'s Glamis oil field. It could use excess processing capacity on the Balmoral floater. Amerada Hess Ltd. is drilling possible satellites to its Ivanhoe/Rob Roy floater.
Occidental Petroleum (Caledonia) Ltd. discovered Westray oil field south of Piper and Saltire fields. The field may turn out to be bigger than the usual satellite structure.
Interest is again centering on the Moray Firth area, where seven blocks are on offer in the 12th licensing round. Ultramar plc and Conoco recently completed tight holes in the area.
In the outer Moray Firth area, Texaco North Sea has run an intensive appraisal program in its Captain heavy oil development on Block 13/22a. It completed three wells last spring.
Immediately south of Captain, a group led by Kerr-McGee (U.K.) plc tested 5,224 b/d of condensate and 22.3 MMcfd of gas in its 13/22b-4 wildcat. BP Exploration, the U.K.'s largest acreage holder, and Shell U.K. Exploration & Production, the second largest, dominate drilling this year.
BP Exploration said its 1990 drilling program is the biggest undertaken by a single company in the North Sea. The company has 13 rigs-eight semisubmersibles and five jack ups. BP has also resumed deep, high pressure, high temperature wells after modifying three of the semis.
Shell Expro, operator of the Shell/Esso group, has a total of 10 rigs drilling in U.K. waters,
NORWEGIAN PROSPECTS
The biggest acreage holder in Norwegian waters, state owned Den norske stats oljeselskap AS (Statoil), has only two operational rigs, reflecting the lack of prospects.
The Ministry of Petroleum and Energy hopes to remedy this situation with its 13th round allocation. Fifty-two blocks are on offer, the largest number since the preliminary rounds in the 1960s.
The blocks are spread between the North Sea, mid-Norway, and the Barents Sea. The deadline for applications is Sept. 14.
In the North Sea, the ministry offered blocks thought to contain prospects that might be developed as satellites of existing fields or that make use of the pipeline network now in place.
At the request of oil companies, the ministry excluded gas prone blocks where possible. However, the gas market outran ministry planners.
Possible delays in second-phase development of Troll field natural gas reserves have made North Sea gas prospects elsewhere attractive. But companies will have to wait until the 14th round to gain access to this type of acreage.
In mid-Norway, the Nordland III area north of the prolific Haltenbanken is being opened in the 12th round with three blocks.
Two blocks are on offer south of Draugen field, which will be the first oil producer on Haltenbanken.
The ministry is persevering with its policy of extending exploration in the Barents Sea eastward toward the disputed zone with the Soviet Union.
Eleven blocks in the eastern part of Finnmark West, the easternmost acreage available, have attracted considerable attention from oil companies prepared to take a long term view of exploration.
Also on offer are four blocks in Quadrant 7316, southwest of Bear Island, which would become the northernmost blocks awarded.
FOCUS ON SATELLITES
As in the U.K. sector, operators in Norway are keen to drill prospects that, if commercial, could make use of infrastructure created by development of the early generations of giant fields.
Saga Petroleum AS is drilling prospects around Snorre oil field on Block 34/7 that could be tied back to the tension leg platform (TLP)-based project under way. During the past year, Norsk Hydro has discovered two small satellites that are candidates for development through Oseberg oil field facilities.
Mobil Development Norway is trying to unravel puzzles posed by previous drilling on Block 35/11, just north of Troll gas field. It drilled a dry hole, a small gas/condensate discovery, and a well with minor oil shows. A well being drilled this summer is probing the southeastern part of the block.
The South Eldfisk Jurassic discovery under the Ekofisk chalk by Phillips Petroleum Co. Norway has rekindled interest in the southern part of Norwegian waters.
Phillips is appraising the strike. BP Petroleum Development Norway is drilling into Jurassic on Block 2/7b about 3 miles southwest of South Eldfisk.
OTHER NORWEGIAN DRILLING
The Norwegian drilling effort outside the North Sea has lost some of its initial momentum.
Acreage in the largely unexplored areas north of the 62nd parallel was increased by the allocation in 1989 of new blocks under the second part of the 12th licensing round.
The previously undrilled More 1 area just north of the 62nd parallel was one of the most popular areas with potential bidders due to identification by seismic surveys of several large structures.
The first well in the area was started by Norsk Hydro at the end of last year. But because of environmental restrictions imposed when the license was awarded, Hydro had to suspend the well in early February without reaching target.
Hydro plans to resume drilling later this month or in early September.
The Barents Sea continues to disappoint operators, at least as an oil province. The first well in the southern margin of Nordkapp basin by Norsk Hydro found minor traces of oil and gas in Jurassic and Triassic rocks.
Esso Norge has returned to Block 7120/10 in gas/condensate prone areas in Hammerfest basin.
A dry hole was drilled in 1984 on the block adjoining the Askeladden West gas prospect.
Statoil has moved into the Nordland 11 area north of Haltenbanken. Companies have been wary of exploration in this gas prone area, but the likely approval of Conoco's Heidrun development will provide a much needed system for gas transportation and make exploration less of an exercise for the next century.
The biggest operator in Norwegian waters is now Norsk Hydro, with three rigs on charter. Hydro has also been drilling the Norwegian extension of Gert oil field in Danish waters. In Norwegian waters, where about 40% of the reserves are located, the structure has been named Mjolner.
Norske Shell also made a significant discovery close to the Danish border. Its 3/7-4 well, the first find in Sojne basin, tested 3,900 b/d of condensate and 29 MMcfd of gas.
Industry sources say the find could contain as much as 500 bcf of gas and 50 million bbl of liquids.
DENMARK'S SPECIAL LICENSES
Denmark is trying to boost exploration in its sector of the North Sea.
After a licensing round at the end of 1989, the government took the unprecedented step of issuing three licenses outside the normal licensing timetable.
In the third licensing round, seven groups were awarded 38 blocks; four were led by a unit of Amoco Corp., acquiring 18 of the blocks. The round also marked the introduction of Dansk Undergrunds Consortium (DUC) to the competitive licensing procedure.
The group previously held exclusive right to exploration and production off Denmark.
Although drilling results by newcomers taking relinquished DUC acreage in the first two rounds were disappointing, the government maintained the interest of foreign companies with an incentive package including abolition of royalty on third round blocks and reduced state participation.
The three out-of-round licenses are likely to boost drilling levels in northern Danish waters, where DUC discovered Harald field.
Two groups led by Norway's Statoil acquired blocks close to the median line with Norwegian waters.
DUC-involving A. P. Moller, Royal Dutch/Shell Group, and Texaco Inc.-acquired Block 5603/28, which adjoins the Gert prospect thought to extend into Norwegian waters.
DUC was involved in a protracted dispute with the government over Block 5603/28, which prevented the acreage's being offered in the third round. The dispute ended with transfer of a 20% carried interest in Gent to the Danish state owned company Dopas.
The end of the dispute will clear the way for further appraisal of the Jurassic structure, thought to contain 120 million bbl of oil.
Of the two new Statoil blocks, 5604/18 might contain an extension of a discovery by Norske Shell in Norwegian waters. Blocks 5604/23 and 24 are thought to contain several Jurassic prospects. Statoil also plans to drill Block 5604/26 south of Harald gas field later this year.
DUTCH LICENSING
Netherlands offered most of its unlicensed offshore acreage in the seventh licensing round at the end of last year.
Oil company interest was centered on 10 blocks in Quadrants L, M, and N, which were previously a military exercise area with drilling prohibited.
The government awarded 49 blocks, which will ensure that the high rate of exploration continues in the next few years.
Nine blocks were awarded in the military zone to groups led by NAM, Bow Valley Exploration, BP Exploration, Elf Petroland, Placid, and ARCO.
Exploration has continued to find small accumulations in prolific Quadrants K and L.
Outside this area, activity has been given a boost by the Petroland-NAM decision to proceed with a gas pipeline linking the northern part of Quadrant F through the less-developed eastern part of Quadrant L to the mainland.
Operators have reported a series of gas discoveries in the southern Dutch North Sea in Quadrants P and Q. Amoco Netherlands Oil Co. made five of them. Amoco also operates Rijn oil field on Block P/15.
The latest Amoco find in June tested 50.3 MMcfd of gas and 1,062 b/d of condensate from the Bunter sandstone.
The structure is thought to contain about 150 bcf of gas.
The biggest of the Amoco discoveries was the P/18a-2 well, which might have found at least 300 bcf of gas. The company is working on a number of development scenarios to bring the reserves from the area ashore through a dedicated pipeline.
Other operators have conducted successful exploration drilling in the Bunter sandstone. NAM found a 250 bcf accumulation on Block Q/16a close to shore, while Wintershall Nordzee's P/14a-1 well discovered gas immediately west of the latest Amoco find.
Drilling has started in the former military zone, where preliminary seismic surveys indicated a number of large structures.
A unit of BP Exploration spudded the M/4b-1 well in May and is thought to be looking at a Bunter gas prospect.
Mobil Producing Netherlands plans this summer to spud its first well on seventh round acreage with the Zapata Scotian jack up, which has been investigating deeper Carboniferous targets for ARCO Netherlands on Block K/3c. In that area, NAM and Petroland soon will begin several development projects.
Drilling has moved into other lightly explored parts of the Dutch sector.
Wintershall Nordzee drilled a tight hole on Block E/10a in the northwest. Petroland also drilled in Quadrant G close to the median line with West German waters. It, too, was a tight hole.
A BOOST FOR IRELAND
Irish activity was boosted by an agreement at the end of 1988 between Marathon, the major acreage holder, and the government that ended a protracted dispute over gas prices.
As part of the agreement, Marathon said it would drill five wells followed by another five wells depending on results.
The first success came with discovery of Ballycotton gas field in 1989, which Marathon is placing on production.
In subsequent drilling, Marathon tested 1,600 b/d and 5.4 MMcfd of gas in its 48/243 well close to a small, noncommercial oil and gas find by Esso Ireland in 1974.
Marathon's 48/24-4 wildcat, drilled by the Western Pacesetter IV semisubmersible, was completed as a tight hole.
The rig moved to a unit of Conoco Inc. to drill the 50/131 well in the eastern part of the Celtic Sea basin close to the median line with British waters.
The acreage was originally licensed to a group led by Total Ireland, but Conoco, Tuskar Resources, and Enterprise Oil plc took farmouts on the block at the end of last year.
Hydrocarbons Ireland, a subsidiary of British Gas plc, has moved into the central part of the Irish Sea to drill 42/12-2 about 62 miles east of Dublin. A well on the block 3 years ago had minor gas shows in a deep Triassic formation.
The latest well is thought to be investigating the same formation in the northern part of the block.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
