More hydrocarbons for LOTOS in Norway

Statoil, LOTOS Norge and Total Norge, which together hold the Utgard licence (formerly Alfa Sentral), have submitted the Plan for Development and Operation of the licence to the Norwegian and British regulators. Production from the Utgard field is scheduled to start in late 2019.

LOTOS’s recoverable reserves amount to 10.3 million boe, and the daily output attributable to its interests is estimated at 4,000 boe.

– The Utgard licence is very important for LOTOS’s business growth in the North Sea – emphasizes Marcin Jastrzębski, Vice President and Chief Operating Officer at Grupa LOTOS S.A. and President of LOTOS Petrobaltic. – Production will be launched with the use, among other assets, of the infrastructure of the Sleipner gas field, in which LOTOS holds interests too, and will continue until 2032 – he adds.

The Utgard licence area is located in the North Sea, on the border between Norway’s and UK’s territorial waters, approximately 20 km to the west from the Sleipner field. The hydrocarbon reserves are located at the depth of 3,700 metres, with the sea depth of 110 metres.

LOTOS’s recoverable reserves comprise natural gas (45%) and condensate (55%), which is light crude used to make such products as gasoline and LPG. The operator of the licence is Statoil. Interests in the Norwegian part of the licence are held by Statoil (62%), LOTOS Norge (28%) and Total Norge (10%).

Sleipner is a major gas hub (distribution centre) on the Norwegian Continental Shelf, linked to numerous countries, including Germany and the United Kingdom, by a gas pipeline network.

Entire recoverable reserves of the Utgard field are estimated at 56.4 million barrels of oil equivalent, whereas capital expenditures are projected at about NOK 3.5 billion (US$410 million).

Discovered in 1982 Utgard (formerly Alfa Sentral) has been considered for development on several occasions in the past, but never made the cut. Statoil, which consolidated its holding in the field this June, by acquiring JX Nippon’s 45% share in the UK portion field, says reuse of existing infrastructure was essential to bringing the field to development.

– I am very pleased that we now can realise a commercial development of Utgard. This clearly demonstrates the effects of the improvement work that has taken place in the oil and gas industry in recent years – says Torger Rød, Statoil’s senior vice president for project development.

The Utgard development will include two wells in a standard subsea concept, with one drilling target on each side of the median line. All installations and infrastructure being located in the Norwegian sector, the UK well will be drilled from the subsea template on the Norwegian Continental Shelf. The distance from the subsea template to the median line is 450 metres.

Gas and condensate will be piped through a new pipeline to the Sleipner field for processing and further transportation to the market. The Utgard gas has a high CO2 content, and will benefit from carbon cleaning and storage at Sleipner.

The Utgard wells are scheduled to come on stream at the end of 2019. In the plateau phase the field will produce approximately some 7,000 Sm3 per day of oil equivalent.

GL, rel (Lotos, Statoil)