Shell hails major gas strike off the coast of Norway

The Scotsman: Shell hails major gas strike off the coast of Norway

25 May 05

JIM STANTON

DEPUTY BUSINESS EDITOR

 

SHELL, the Anglo-Dutch energy giant, appears to have made its biggest gas strike off Norway for more than a decade.

 

The company said it had found gas at its Onyx prospect in the Norwegian Sea, with Norwegian officials suggesting a major find.

 

In a statement, the Norwegian Petroleum Directorate (NPD) said: “The size of the discovery may approach 60 billion standard cubic metres of producible gas.”

 

It added: “Gas was proven in Jurassic sandstones and two successful production tests were performed.”

 

But the exact size of the discovery will not be known until after further assessment of the prospect, the NPD said.

 

NPD official Johannes Kjoede said: “In today’s world, 60 billion standard cubic metres of gas is a fairly good discovery, even internationally, and in our part of the world a very good discovery.”

 

Rien Herber, exploration director of Shell Exploration & Production in Europe said: “Information from core, fluid sample and production test data indicates the presence of a substantial gas column, which is very encouraging and there are indications that we are dealing with a significant find.”

 

Einar Knudsen, Norske Shell’s spokesman, also said it was too early to determine how fruitful the discovery would prove.

 

But he described the strike as “significant in an international context” and said it was Shell’s most important find off Norway since Draugen oil in 1984.

 

Mr Knudsen added: “It is important, but it is a little too early to say how big it is and if and when it can be developed. But of course it is an important find.”

 

He said Norske Shell was now planning an appraisal well on the discovery and a wildcat well on another site covered by the same production licence during the second half of 2006.

 

The last big find off Norway was the Ormen Lange gas field, discovered in 1997, due on stream in 2007 and estimated to hold 375 billion cubic metres of gas.

 

The Onyx prospect, about 25 miles west of Shell’s Draugen field, is only about one-sixth as big as Ormen Lange, but lies in a “growth area” where several other fields are in production or under development, Mr Kjoede said.

 

But it is likely to prove the biggest find off Norway since ExxonMobil found gas at the Victoria prospect in 2000, Mr Kjoede added.

 

In recent years, the results from exploration in Norwegian waters have been pretty disappointing.

 

However, Norway remains the world’s third biggest oil exporter and Western Europe’s biggest gas producer.

 

Mr Knudsen said finding Norwegian gas was important to Shell “because this is part of our plan to supply Europe with more integrated gas, so it is important also in a European context”.

 

THE FACTS

 

Who owns the Onyx prospect? Norske Shell – Shell’s Norwegian subsidiary – operates the field in the Norwegian Sea. It has an equal 30 per cent stake along with Norway’s state-owned Petoro group, while Total and Statoil have a 20 per cent share each.

 

How deep was the well sunk? It was drilled in 308 metres of water to a total depth of 5052 metres below the seabed.

 

Is the find worth shouting about? Yes. It’s sizeable but only about one-twentieth as big as Norway’s biggest gas field Troll, which contains around 1.32 trillion cubic metres of recoverable gas reserves.

 

Where is Shell in the world energy rankings? It’s in third place, behind ExxonMobil and BP and ahead of Total.

 

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