Shell drops Ormen Lange subsea compression project

The Ormen Lange partners have decided to postpone the Offshore Compression Project for Ormen Lange field, and stop the ongoing concept select work.

The partners have been working towards a concept select decision for offshore compression, either a subsea compression solution or a tension leg platform solution for the Shell-operated Ormen Lange field the southern part of the Norwegian Sea, since 2008.

“The decision is based on an updated economic assessment incorporating new cost information for the current concepts and updated analysis of the reservoir. The current concepts do not provide an economic return based on the required capital investment and expected production volumes. The updated reservoir analysis also shows that offshore compression timing is not critical to the ultimate recovery of the field”, says chairman of the Ormen Lange Management Committee, Odin Estensen.

“The oil and gas industry has a cost challenge. This, in combination with the maturity and complexity of the concepts and the production volume uncertainty, makes the project no longer economically feasible. The Ormen Lange licence remains committed to the ambition of maximizing the ultimate recovery from Ormen Lange in a sustainable manner. Significant new information both on reservoir behavior and technology developments will become available in the next few years, and provide basis to re-evaluate new options”, Estensen says.

“The Ormen Lange Licence group believes in the subsea compression technology, and still regards the qualification of this technology to be an important stepping stone for the Ormen Lange future development alternatives. Subsea compression technology is a key contributor for ongoing and future field developments on the Norwegian Continental Shelf, “ Estensen says.

The decision is supported by all Ormen Lange partners, except Petoro, Shell said in a statement.

Ormen Lange Partnership: Shell (Operator 17.81%), Petoro (36.49%), Statoil (25.35%), DONG Energy (14.02%), ExxonMobil (6.34%)

 

 April 11, 2014

 

 

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