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Faroe oil exploration with the area of Brugdan II starts

15/06/2012 | By More

Faroe Islands has more than 40 licences ready for deepwaters drilling

Faroe:

COSL Pioneer on way to Faroe Islands from Norway

The Chinese oilrig drilling vessel, COSL Pioneer is now on its way to Faroe Islands from Norway, to start a drilling operation on the Faroese continental shelf where it is to drill the Brugdan II area.

The rig will arrive to the Faroe area next Saturday, June 16. and a few days later, start drilling. The whole drilling process will take about 130 days in the Faroe Islands.

The rig will perforate at a depth of 400 to 500 meters and self-drill work will be, between 4,000 and 5,000 metres into the seabed.

If drilling meets what the oil companies believe that lies under the seabed, could the Faroe Islands on coming years, become one of the richest nations of the world.

It is the Norwegian oil company Statoil (holds a 50% stake), the United States oil company ExxonMobil (holds a 49% stake) and the Faroe oil company Atlantic Petroleum (holds a 1% stake) which stand together for this project.

Both in Faroe Islands and Norway has preparations for the prolonged, of the Faroe drilling, this summer, been underway for some time, now looks set to become the longest and most expensive on the Faroe Shelf since drilling started over a decade ago. The cost is estimated at 13.4 million euros.

Faroe Islands has built a substantial portfolio of exploration, appraisal, development and production assets across the Atlantic Margin, the UK and Norwegian North Sea and the Norwegian Sea.

Faroe Islands portfolio encompasses more than 40 licences located west of the Shetlands, offshore the Faroe Islands, the UK North Sea and Norway. In addition Faroe now has interests in 10 producing oil and gas fields in the UK and Norway.

“We all hope this summer’s drilling operation will deliver a good result. However, it will not be a disaster for the Faroe if not commercial discovery is made this time round either. The Brugdan II will no doubt provide much very useful information and therefore we should not regard this well as a make or break situation for oil exploration in the Faroe”, says the experienced Norwegian geologist Mr Terje Hagevang”, oljan.fo reports.

Mr Hagevang participated at the geological conference held at the Nordic House in Tórshavn recently. He thought the conference was very interesting and informative. He is also very excited to see what emerges from the pending drilling and sincerely hopes Statoil, together with their partners, will make a discovery. He adds however, that we should be very careful not speak too much about this drilling as a make or break drilling for a Faroe oil industry:

Faroe:

Drilling has now started on the Kalvklumpen prospect in the Norwegian North Sea in which the Faroe Petroleum holds 20 percent

“We hear far too many people speak about the Brugdan II well as if this will be the final decision regarding all future oil exploration in the Faros, hinging upon what result emerges from this well drilling. The oil industry does not operate in such a manner. In the beginning the likelihood of making a discovery are far less compared to making a discovery. In the event no discovery is make this time either, the information gained from the drilling, will no doubt be of vast importance to future exploration efforts”, says Mr Hagevang.“Of course we all hope a commercial discovery will be made this summer, but it will not be a complete disaster if Brugdan II does not become a commercial find. The information gained will provide the oil companies with much valuable information”.

“Another well will be drilled in two years’ time and who knows if not several more wells will see the light of day in the future”, says this Norwegian geologist, who must be the foreign geologist who has monitored exploration in the Faroe for the longest time, stretching back to the mid-90ies, when he arrived in the Faroe representing Saga Petroleum. Today he is the exploration manager for the UK based Valiant Petroleum.

Shooting seismic
Valiant Petroleum is one of the oil companies holding two Faroe exploration licenses and is the operating company in both licenses. The company originally held three Faroe licenses, but recently returned one license to the Faroe petroleum authorities. The company is currently shooting 2D seismic in Faroe waters and the company TGS is conducting this work. TGS is otherwise involved in a rather large-scale Faroe work project at the moment and will be involved in shooting seismic for the next two months. A representative for TGS says this project is both for their own account and for various oil companies – one of them being Valiant Petroleum.

But we have two sides, on every coin. Deepwater drilling in the area has attracted strong criticism. Environmentalists have claimed that the Deepwater Horizon disaster in the Gulf of Mexico showed the dangers inherent in exploring such areas.

The strata are considered similar to those which are expected on the Icelandic Dragon area (Drekasvæðið) and a specialist of the Norwegian Petroleum Safety Authority has expressed its view, that the results obtained in the Faroe Islands will influence the development of oil exploration in Iceland.

Icelanders have it, just like the Faroe Islands, reason for success by this drilling in coming next weeks. Not only could it open doors for oil exploration in the jurisdiction of Iceland, but if the drilling may encounter oil in the Faroese waters, it will also sweep into a huge labour, on a large scale, from other neighbouring countries.

But take a look, how the oil exploration and production cycle in real looks like;

The Faroe operations of an oil and gas company comprise of five phases

exploration, appraisal, development, production and abandonment. In practice, the advancement from one phase to the next is conditional on continued verification of a positive assessment of the commercial potential of a discovery or field.

Phase 1: Exploration
Oil exploration typically depends on highly sophisticated geophysical technology to detect and determine the extent of potential structures. Areas thought to contain hydrocarbons are initially subjected to a gravity survey, magnetic survey and regional seismic reflection surveys to detect large scale features of the sub-surface geology. Features of interest (known as “leads”) are subjected to more detailed seismic surveys to refine the understanding of the sub-surface structure. Finally, if a prospect is identified and positively evaluated, an exploration well is drilled in an attempt to conclusively determine the presence or absence of oil or gas. Oil and gas exploration is an expensive, risky operation with a high likelihood that nothing will be found, or that hydrocarbons will be found in such small quantities that it is not worthwhile producing them. In the North Sea only about one in eight exploration wells find quantities of oil and gas that are economic to develop. It often takes several years from being awarded an exploration licence to the drilling of the first well.

Phase 2: Appraisal
Appraisal of a discovery involves drilling further wells to reduce the degree of uncertainty in the size and quality of the potential field. If an exploratory well shows that hydrocarbons are present, more seismic data may be gathered and one or more appraisal wells may be drilled. Based on the data from this process it is possible to estimate the quantities and producibility of oil and gas in the field.

Phase 3: Development
If commercially profitable accumulations of oil and gas are found during appraisal drilling, the development phase begins. This phase involves planning and deciding on how to develop the discovery. Crucial factors for value creation in this phase include choosing the most cost-effective type of development and production activity and ensuring that the project can be completed on schedule. This phase involves considerable investment, especially when the production facilities are located offshore.

Phase 4: Production
The production phase involves production of oil and gas and also water, in different proportions. Value creating factors in this phase are production well planning, maintaining the rate of production and maximising the life of the accumulation by injecting gas or water into specifically designed injector wells to maintain the pressure.

Phase 5: Abandonment
Abandonment is the last phase of a hydrocarbon development project and involves the decommissioning of any installations and subsea structures associated with the field.

See this video below; which shows the process of deepwaters drilling.

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Category: Faroe Islands

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