Norway’s Statoil ASA (STO), along with its partners that include Italy’s Eni SpA (E), is mulling over its decision to develop the Skrugard discovery in the Barents Sea by using a floating production system. The new facility would help in the economic and rapid development of the prospect and thus establish a new field centre in the frontier Arctic region.
The use of this new facility will increase the processing capacity and movement from other prospects in the vicinity. The unit will have a production capacity of 95,000 barrels of oil per day with provisions for separate oil storage and offshore loading capability.
Skrugard is estimated to contain around 250 million barrels of recoverable oil equivalent. However, Statoil expects this estimation to be conservative and sees considerable upside from satellite prospects like Havis, where drilling began in early December. Per the feasibility study prepared by Statoil, 14 oil producers would be employed on the seabed for the development of the field with additional pressure support acquired through injection wells for water and gas.
Statoil will use the semi-submersible rig Aker Barents for appraisal drilling at Skrugard, scheduled to begin in January, after the rig completes the Havis probe.
Statoil plans to include all the possible discoveries in the surrounding area under a total development solution. The company will employ standardized technology for Skrugard development, similar to the ones used for Statoil’s fast track developments in the North Sea and will thus be equipped to deal with the harsh weather conditions in the Barents Sea.
Statoil’s upcoming field center is located in an area which has no infrastructural set up, as Skrugard is situated about 100 kilometers north of the Snohvit gas field, 150 kilometers north of Eni’s Goliat field and 200 kilometers off the northern county of Finnmark.
Further development plans for the field will be based on the incoming well results, from the exploration well on Havis and the appraisal well on Skrugard. This is aligned to Statoil’s goal of developing the Barents Sea as a key area on the Norwegian Continental Shelf.
Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. We maintain a Neutral rating on the stock for the long term.
To read this article on Zacks.com click here.
Zacks Investment Research
