Developers and investors holding old, "depleted" oil and gas fields, take note -- you might be sitting on a lot more in reserves than you think.
That's the message this week from a world-first breakthrough in offshore production, coming in the mature climes of Norway's North Sea.
Veteran operators Statoil and OMV said they have installed the world's first subsea wet gas compressor; a piece of equipment that has single-handedly led to a massive leap in recoverable reserves at the target Gullfaks natural gas field.
Compressors are a common piece of equipment at North Sea gas fields -- used to keep up production even as pressure in a reservoir formation falls due to pumping over time. Related: The End Of The European Refining Boom Or Just A Pause?
Up until now, compressors have been mounted above-water, on top of production platforms. But Statoil's new tech changes that, by placing the compression equipment directly on the seafloor.
And that change in location makes a huge difference -- actually creating new reserves.
The things is, compressors work more effectively when located closer to the wellhead. And the seafloor is as close to the wellhead as it gets -- making the subsea compressor the most optimized position for this type of technology. Related: Day Of Reckoning For U.S. Shale Will Have To Wait
The impact on production and reserves is huge with Statoil estimating the Gullfaks subsea compression system will extract 22 million barrels of oil equivalent (boe) above and beyond what previous equipment could have accomplished.
In effect, this breakthrough has added new reserves out of thin air.
This is one of the biggest developments in decades for the offshore sector, with Statoil having been working on the technology since 2005. Related: Oil Glut Appears To Be Getting Worse, Not Better
And this leading-edge strategy is now being deployed across the North Sea with a $2.3 billion installation now going ahead at Statoil's Asgard complex -- expected to increase production by a stunning 306 million boe over the field's life.
This is the kind of stealth engineering shift that turns fields from marginal to marvelous. Watch for big value being created as this ripples through the E&P sector.
Here's to a breakthrough on breakthroughs,
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