Equinor and Faroe Petroleum have agreed on a number of transactions in the Norwegian Sea and the North Sea region of the Norwegian Continental Shelf (NCS).

These transactions are calibrated as a balanced swap when it comes to value with no cash consideration.

“The net effect of our agreement with Faroe is to upgrade Equinor’s portfolio in line with our updated roadmap for the NCS. We are strengthening our operated position in the prolific Njord area, which we believe continues to have considerable upside potential. We remain operator and majority equity holder in Alve which is produced via Norne, another important part of the Norwegian Sea for us. And we are reducing our exposure to non-core and partner-operated assets,” says Siri Espedal Kindem, Equinor’s senior V.P. for Operations North.

The Njord field was in production from 1997 to 2016. The platform and the storage vessel have been brought to shore for an extensive upgrade. The field is planned to restart in 2020 and produce until 2040. The remaining reserves for the Njord and Hyme fields are estimated to be 175 MMboe, while Bauge has a reserves estimate of 73 MMboe.

The effective dates of the transactions are Jan. 1, 2019 with closing subject to government approval.

Equinor is stepping up its use of wired drill pipe to acquire subsurface real-time data during drilling operations, in line with the corporate digitalization strategy and to prepare for automated drilling.

Photo: Intelliserv. The wire inside the drill pipe allows high-speed data transfer.

NOV and Schlumberger have been awarded corporate frame agreements for global deliveries of wired drill pipes to Equinor. Both suppliers use solutions from IntelliServ, which is owned by NOV and Schlumberger.

In addition to the corporate frame agreements with the two suppliers, commitments have been made on the use of wired drill pipe delivered by NOV for specific operations, such as Mariner in the UK, the West Herkules exploration campaign on the Norwegian continental shelf and Transocean Enabler’s drilling campaign on Trestakk. Estimated value of this work scope is around $35.35 million (NOK 300 million).

The contracts allow the technology to be used on all Equinor installations globally. The total contract value may exceed $117.8 million (NOK one billion) during the first three years of the contract period.

“This technology gives us a deeper understanding of what is happening inside and around the well during drilling, and makes it easier to make the right choices, based on real-time data, during the drilling operation. We will eliminate expensive mistakes, such as obstructions in the open hole during and after drilling and having to drill sidetracks. It also gives us a better understanding of the reservoirs and enables us to optimize the well placement. We become more efficient because we can control the speed and power of the drilling against the limit values that are most suitable underground,” says Geir Tungesvik, head of TPD Drilling & Well.

He says that Equinor has already good experience from using this technology during the Barents Sea exploration campaign last year.

“That is why we are expanding the use of this technology, while we are upgrading all rigs and some platforms in 2018 and 2019 to prepare for more automated drilling. This technology is an important element of our digitalization strategy. I look forward to expanding the use of high-speed data transfer, which I believe will help ensure safer and more efficient drilling operations,” he says.

The wire inside the drill pipe allows high-speed data transfer. The signals transmitted through the drill pipe are estimated to be 10,000 times faster than the pressure waves of the drilling mud in conventional drill pipes.

“We are pleased about awarding these global contracts and we are looking forward to the cooperation with NOV and Schlumberger. At the same time, we want the industry to keep developing this kind of technologies. Technology development in this segment is progressing fast and we are eager to see the development of other solutions in the market that may be relevant for us to test in the short or longer term,” says Peggy Krantz-Underland, Equinor’s head of procurements.

The Ministry of Petroleum and Energy has approved the plan for development and operation (PDO) of the Troll Phase 3 development.  Capital expenditures of $918.5 million (NOK 7.8 billion) will help extend the productive life of the Troll field beyond 2050.

A unique oil and gas field globally Troll generates highly important to value for the Norwegian society. Since it came on stream in 1995 the field has generated an estimated NOK 1,400 billion, i.e. $20.6 million (NOK 175 million) per day.

“With a break-even of less than $10/bbl, Troll Phase 3 is one of the most profitable and resilient projects ever in our company.  Thanks to the PDO approval Equinor and its partners can now deliver another 2.2 Bboe from the field with a CO2 intensity of 0.1 kilo/bbl,” says Torger Rød, Equinor’s senior vice president for project management.

“Equinor will work closely with partners and suppliers planning start-up of the field in the first half of 2021,” says Rød.

“This adds a new chapter to the amazing Troll story. The field has an important part in our plans to transform the Norwegian continental shelf for sustainable value creation for several decades,” says Gunnar Nakken, Equinor’s senior V.P. operations west.

“Troll is the biggest gas producer on the NCS, meeting 7% to 8% of Europe’s total daily gas consumption. We will deliver safe, profitable and carbon-efficient energy from Troll that helps reduce coal consumption and reduce CO2 emissions in Europe with a long-term perspective beyond 2050,” says Nakken.

The development of Troll phase 3 is also important for Norwegian supply industry. About 70% of the value creation will take place in Norway.

The partnership has awarded contracts within marine installations and subsea facilities totalling an estimated $111 million (NOK 950 million) to the companies Nexans, Deep Ocean, IKM, Allseas and Marubeni.  In addition, the partnership has awarded contracts worth approximately $235 million (NOK 2 billion) for subsea facilities and the construction of a new processing module on the Troll A platform to Aker Solutions.

Troll partners: Equinor (30.58% – operator), Petoro (56%), Norske Shell (8.10%), Total E&P Norge (3.69%), ConocoPhillips Skandinavia (1.62%)