Production from Norway’s Utgard field was launched on September 16th 2019. The project had been completed about three months ahead of schedule with about 25% savings compared to the assumed budget. LOTOS Exploration & Production Norge (LOTOS Norge) is a partner in the licence, operated by Equinor. The field is an important part of the LOTOS strategy in exploration & production.
Utgard is located in the central North Sea, at a depth of 3,700 metres (with a water depth of 110 metres). It is located approximately 21 kilometres from the existing Sleipner hub, straddling the boundary between the Norwegian and British shelves, which makes it the first cross-border field developed by Equinor Energy AS. The company holds a 38.44% interest in the licence, acting as its operator. The interest held by LOTOS Norge is 17.36%, with Equinor UK Limited (a 38.44% interest) and KUFPEC Norway AS (a 6.2% interest) being the other licence partners.
The project was completed about three months ahead of the original schedule with about 25% savings compared to the assumed budget, with the highest standards in the HSE area. Utgard was developed under a ‘fast track’ model, and it took less than three years from regulatory approval of the plan of development and operation (PDO), issued in January 2017.
Utgard relies on the nearby Sleipner facility, which delivers additional synergies and added value for the entire Sleipner hub – one of the two key areas, next to Heimdal, covered by LOTOS operations in Norway. The recoverable reserves of the Utgard field are estimated at 40 million barrels of oil equivalent (boe) of which, as mentioned above, 17.36% would be attributable to the LOTOS interest.
“With the launch of Utgard, we are strengthening our position in Norway. It is another major step in the delivery of our exploration and production strategy,” notes Mateusz A. Bonca, President of the Management Board of Grupa LOTOS S.A. “Completed ahead of schedule and below budget, the project is a perfect example of why it makes sense to work with experienced partners. Moreover, using the existing infrastructure of the Sleipner production area, where LOTOS holds a 15% interest, allows us to capture additional operational and business synergies.”
The Utgard discovery was made in 1982,and its development was considered several times. Technical standardisation solutions in the design process finally made it possible to optimise costs so that a PDO was submitted to the Norwegian and British authorities in 2016.
Hydrocarbons are produced by two wells tied back to the Sleipner field via a subsea pipeline. The infrastructure is located on the Norwegian side, while the wells are on either side of the boundary line. Most of the field’s reserves being accumulated on the Norwegian side, Utgard is remotely operated from Norway’s Sleipner field. Utgard also relies on the existing Sleipner facility to process gas and inject the separated CO2 into storage space (a CCS process). The necessary modifications to the Sleipner facility for Utgardtie-back were made in the third quarter of 2018.
***
LOTOS Norge explores for and produces hydrocarbons on the Norwegian Continental Shelf. The company is a member of the LOTOS Upstream Group (part of the LOTOS Group) responsible for the implementation of the LOTOS E&P segment’s strategy in the North Sea and Norwegian Sea. Its daily production volume is currently 15,000 boe.
Established in 2007, a year later LOTOS Norge was approved by the Norwegian authorities as an operator of exploration and production licences. The company aims to further growth its business through active participation in APA rounds. LOTOS Norge drilled its first exploration well as a licence operator in 2012. In 2013, it acquired an interest in the Heimdal area, and in 2015 – in the Sleipner area. Currently, work is under way to develop the Yme, Trell and Trine discoveries as well as some deposits located within the Greater Heimdal area (NOAKA project).