Northern light

Thanks to rising oil prices and a number of tax breaks introduced by the UK government, North Sea oil and gas is reportedly experiencing its biggest surge in investment since its heyday in the late 1970s and early 1980s.

Trade body Oil and Gas UK claimed in August that capital spending in the North Sea was to hit an all-time high of £13.5 billion in 2013.

While much of this will be spent on upgrading and extending the life of existing fields, many projects that were previously considered too expensive to develop will now go ahead thanks to the tax breaks and new technology.

By far the largest of these – indeed, the largest new North Sea project for more than a decade – is the Mariner heavy oil field. Majority owned by Norwegian major Statoil, this project will require a £4.6 billion investment over its 30-40 year production life.

The bulk of this will be spent during development and construction. The production, drilling and quarters (PDQ) unit to be built by Daewoo Shipbuilding & Marine Engineering (DSME) is estimated to have a basic cost alone of £1.2 billion before various accommodation and technology options are added.

Statoil has been very active in supporting new seismic technologies and we will continue to do so

Statoil vice president Ingolf Søreide

The man in charge of this project, the second largest process project in the UK after Hinkley Point C nuclear power plant, is Statoil vice-president Ingolf Søreide.

Process Engineering caught up with Søreide at this year’s SPE Offshore Europe show in Aberdeen in September.

Softly spoken and with a gentle Norwegian accent, Søreide has a genial and relaxed manner that belies the fact that he heads up one of the largest procurement processes currently being undertaken in this country.

Many of the major contracts for the scheme, which comprises a conventional platform and a floating storage unit (FSU), have been awarded.

In addition to DSME’s PDQ win - with the Korean firm subcontracting detailed design work to CB&I and Rig Design Services (RDS) - other contracts include one for Emerson to supply pressure and temperature measurement equipment, and another to Subsea 7 which will be responsible for the EPC and installation of 39km of rigid flowlines and flexible riser systems.

However, Søreide says the project will only be successful through continuing supply chain collaboration.

The Mariner field comprises two shallow reservoirs with a very heavy crude oil of around 12 to 14 API in weight and between 67 cp to 508 cp viscosity.

While many firms have considered developing the field since its discovery in 1981, all had declared it unfeasible up to now.

When the project begins operations in 2017, Statoil plans to use between 50 and 100 production wells - each with its own dedicated electric submersible pumps (ESP) - to push the oil to the surface.

Though flow will at first be maintained through water injection upstream of the ESPs, the heavy nature of the oil means that after the early “easy wins” something more viscous than water will be needed to push the heavy oil out of the reservoir and up to the surface.

Statoil has commissioned a study into the use of polymer flooding, and it is in this area that Søreide is particularly keen to work with the process industries to develop a cost-effective solution.

“We see potential for increasing oil recovery by injecting polymer,” says Søreide. “If we can increase the effective viscosity of water from 1 CP to 15-20 CP we will have a much more effective field.

“However, the cost of polymers is quite high today compared with how much extra oil they can provide. If suppliers can work on their cost-efficiency and oil recovery, that would enable us to sanction polymer flooding for Mariner.”

Søreide adds that Statoil is open to the use of either synthetic or biopolymers, although the latter are considered to be more effective from an oil recovery viewpoint.

Given how critical the ESP pumps are to the operation, Søreide is also keen to work with suppliers on increasing the operating lives of the pumps.

“ESPs tend to have a lifetime of four to eight years, although we know from experience that they can have failures earlier,” says Søreide. “What can suppliers do to prolong the life of ESPs?”

Finally, while a number of seismic surveys of the Mariner field have been carried out and Statoil has a good understanding of the geology of one of its reservoirs, Maureen - the larger Heimdal reservoir, which contains two thirds of the field’s total reserves - has proven difficult to map.

“We do not have very good mapping of the sand and we can barely see the top reservoir sand channels on the seismic survey,” says Søreide.

“We would like supply chain to come up with tools such as acoustic measurement so that when we start drilling, we can be as accurate as possible. I would like to send out signals so that I can see where the sand is and where the bottom of the reserve is.

“Statoil has been very active in supporting new seismic technologies and we will continue to do so. If you can improve the resolution of your data you will have a much easier job mapping your reserve, and you will be able to increase the oil well recovery.”

As a client, says Søreide, he always prefers to work with as few suppliers as possible.

But since the project requires cutting-edge technologies in areas such as polymers and geological mapping, he will not allow his preference for bundling contracts together to exclude those smaller companies that may offer the technical solutions he seeks.

“We should be careful we don’t miss really good technical solutions,” he says. “There may be a supplier that has 80% of the solutions but is lacking in one key area. If that is the case we will ask that supplier to work with another that does have the services or equipment necessary to provide the best solution.”