Statoil ASA’s (STO) Gudrun project, off Norway, which lies in production license (PL) 025 of the North Sea, is expected to come online in the first quarter of 2014. Its West Epsilon rig is actively drilling wells that need to be completed for production start-up in 2014.
High pressure and high temperature are the distinguishing features of the Gudrun field. Pre-drilling of seven wells is necessary for the start of actual production because of the distinctiveness of the field.
Production from the seven wells of the field is estimated to be around 67,000 barrels of oil equivalent. All these wells would be pre-drilled through the jacket before fixation of the topside in 2013. Drilling on the first well started in the first week of September and the entire drilling process is expected to continue till 2014.
This process of drilling is beneficial as it leads to a more balanced utilization of equipment and resources, resulting in increased safety and competence. It is implemented to evade depletion issues which would lead to reservoir depressurization and thereby complicate the drilling process.
Licensees in PL 025 are Statoil, the operator with 75% interest and GdF Suez with 25%. Statoil is also trying to attain consent for the drilling of a production well on the Brynhild discovery.
We appreciate Statoil’s endeavor to improve recovery of resources in mature fields. Production growth from international operations is also a key component of the company’s overall annual upstream growth plans over the next few years. We maintain a Neutral rating on the company for the long term. The company faces tough competition from Eni SpA (E) and BP Plc (BP).
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