Mikkel allocated

October 20, 2000, 17:45 CEST

A share in supplying gas to meet Norwegian sales contracts has been allocated to Statoil's Mikkel field in the Norwegian Sea.

This decision by the Ministry of Petroleum and Energy gives the green light to plans to produce these reserves from 2003 to 2010, and possibly to 2013-14.

"Now that we've received an allocation, we'll resume discussions with the Åsgard and Draugen licences on a tie-in to one of these fields," says project manager Kjetil Ohm.

These talks were suspended last spring because the commercial terms for a development were considered inadequate.

The Mikkel licensees, who also include the state's direct financial interest (SDFI), ExxonMobil and Norsk Hydro, are still considering two options for bringing the field on stream.

One is a subsea system with wellstreams transferred to Statoil's Åsgard B gas floater via the Midgard deposit, recovering 19 billion cubic metres of gas for an investment of NOK 2 billion.

The other involves a tie-in to Shell's Draugen platform, allowing 19-24 billion cubic metres to be recovered at a development cost of NOK 2-4 billion.

Both options involve piping the gas through the Åsgard Transport trunkline to Statoil's Kårstø treatment plant north of Stavanger and on to continental Europe.

The licensees aim to select a solution before the New Year so that a plan for development and operation can be submitted to the authorities during the first quarter of 2001.

They are also working to establish a unitisation agreement for the two Mikkel production licences, 092 and 121, which have the same partners. However, their interests differ between the two licences except in the case of Hydro.