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Statfjord late life contracts awarded

April 13, 2005, 10:50 CEST

Three engineering, procurement, construction and installation (EPCI) contracts worth a total of just over NOK 3.1 billion have been awarded by Statoil for the Statfjord late life project.

These assignments have been placed by the group as operator on behalf of the Statfjord licence in the North Sea.

Aker Kvaerner has been contracted to perform modification work on Statfjord B and C under a contract worth just over NOK 1.9 billion.

Modifications with a value of NOK 600 million are to be carried out on the Statfjord A platform by Vetco Aibel.

And Smedvig has won a contract worth almost NOK 600 million to modify the drilling facilities on the B and C installations.

Currently the drilling contractor on Statfjord, Smedvig will also be responsible for drilling and well operations in the late life project.

“These awards build on an overall assessment which has placed emphasis on the ability to deliver and commercial terms,” says Bjarne Bakken, project director for Statfjord late life.

The modification work is due to start in the autumn of 2005 and will last for a period of four-five years with the field in full production.

The suppliers estimate that roughly 1,000 people will be involved in the work in connection with these three contracts, with extra staffing in peak periods.

“This is the largest and most complex offshore conversion we’ve ever tackled. Good cooperation with the contractors, where we work together for positive safety results, will be crucial for success,” Mr Bakken notes.

Currently producing oil with associated gas, the field installations are to be converted to handle gas with associated oil.

This will raise the recovery factor on Statfjord to almost 70 per cent of the stock tank oil originally in place (Stooip) and 75 per cent of the gas, and keep the field producing towards 2020.

Total investment in Statfjord late life is put at NOK 14.5 billion, plus NOK 1.5 billion for the associated Tampen Link pipeline.

Modifications are expected to account for about 60 per cent of the spending, well work and artificial gas lift for 30 per cent, and a new gas export solution for 10 per cent.

Remaining major contracts relate to the pipeline, and these are expected to be placed before the summer of 2005.

The present awards are conditional on government approval of the revised plan for operation and development (PDO) of the Statfjord field.

Licensees in the Statfjord unit are Statoil (operator) with 44.34 per cent, ExxonMobil Norge 21.37 per cent, Norske ConocoPhillips 10.33 per cent, Norske Shell 8.55 per cent, ConocoPhillips (UK) Ltd 4.84 per cent, BP Petroleum Development Ltd 4.84 per cent, Centrica Resources Ltd 4.84 per cent and Enterprise Oil Norge 0.89 per cent.