2010 ON/OFF. Offshore Oil & Gas. Offshore Wind Power. Health, Safety, Environment and Quality (HSEQ)

Transcription

1 2010 ON/OFF Yearbook Offshore Industry in Denmark Offshore Oil & Gas Offshore Wind Power Health, Safety, Environment and Quality (HSEQ) Projects Members

2 Making the most of global resources Maersk Oil discovered its first oil in the Danish North Sea in Today Maersk Oil is a global operator producing some 800,000 barrels of oil equivalent per day. Being the best operators of tight chalk fields and among the most efficient field developers, Maersk Oil has a proven track record of making the impossible possible within the E&P industry. We turn opportunities into reali by continuously improving our technical capabilities and developing new innovative solutions. With operations and activities in several locations such as the North Sea, Qatar, Brazil, Algeria, Angola, Kazakhstan and the US Gulf of Mexico, Maersk Oil aims to serve its many stakeholders by operating safely and efficiently. The career opportunities we offer are as diverse as our geographical spread making a powerful proposition for professionals who wish to be at the forefront of the oil and gas industry. At Maersk Oil we foster a creative environment where employees are empowered to develop solutions to highly technical and complex challenges. As we make the most of our global resources, you can make the most of the opportunities we offer. Explore more at

3 Over the years, Danish offshore industry has built up significant competences to make it capable of operating not only in the offshore oil and gas industry, but also in the field of wind energy. In addition, the industry is increasingly involved internationally. ON/OFF outlines the status of developments in Danish offshore industry by describing successful business areas and new projects and takes stock of the past year. Both nationally and internationally we face great challenges. However, there are great opportunities as well, and through articles and coverage of ongoing development projects we will provide you with our take on a dynamic and innovative industry. ON/OFF is divided into 3 overall aspects: oil and gas, offshore wind energy and HSEQ. Moreover, we cover ongoing development projects and other activities initiated by and its members. It is our hope that ON/OFF will serve as an enlightening and inspiring presentation of the Danish offshore industry. Peter Blach Director, is a member based organization with the main purpose to strengthen the Danish offshore industry in the global market. The centre ties together the different parties of the offshore community: Industry companies, Consultants, Universities and Governmental institutions. Our members count 214+ and include all key players in the Danish offshore market - from oil/gas operators over offshore wind farm developers to suppliers of equipment, tools, services and education. ON/OFF Yearbook February 2010 Editor: Morten Holmager mh@offshorecenter.dk Graphic production: Jan C Design & Kommunikation ISBN: X 3

4 WE FIND ENERGY ABOVE AND BELOW THE SEA DONG Energy has been active in the exploration and production of oil and natural gas for more than 20 years and now manages a portfolio of more than 70 oil and gas licenses. Our activities are strategically located in the North Sea, in the area West of Shetland, the Barents Sea, the Faroe Islands and Greenland. One of our major assets is our part-ownership of the Ormen Lange natural gas field in the Norwegian sector. DONG Energy s objective is to triple its renewable capacity within ten years, and wind power is an important means to reach this goal. In 2009, we opened the world s largest offshore wind farm to date, Horns Rev 2, in the North Sea 30 km off the Danish west coast. The wind farm produces electricity equivalent to the consumption of about 200,000 households a year. We have more large offshore wind farms in the pipeline. DONG Energy has Gunfleet Sands and Walney in progress, and together with our partners we will build the London Array offshore wind farm. London Array will be located in the North Sea at the mouth of the Thames, and when completed it will be the world s largest offshore wind farm. DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. We have approximately 6,000 employees and generated more than DKK 60 billion (approx. EUR 8.2 billion) in revenue in For further information, see www. dongenergy.com. 4

5 OFFSHORE CENTER DANMARK Content Energy research - offshore as well By Minister of Science, Technology and Innovation Helge Sander (Denmark s Liberal Party)...7 Facts about Danish offshore oil & gas and offshore wind national knowledge and innovation centre...11 OFFSHORE OIL & GAS Oil and gas a necessary source of profit and jobs...12 Great investments in exploration and development...14 Ceramic spheres help extract oil...16 Furture lies in deep waters...19 Storing of CO 2 new business area in North Sea...20 Noreco busy doing experiments...22 Greenland preparing for new oil hunt...24 Ilulissat prepares for oil adventure...28 A leap into the unknown...30 Greenland time for another round...32 Asia a significant market in future...34 Still good business opportunities in West Africa...36 Semco Maritime strengthens its foundation...38 Scrap metal worth hundreds of millions of Euros...40 Advice: SMEs should be flexible and ready to board the train...42 New offshore growth areas help SMEs ride out financial crisis...44 Need for better overview of education & training for SMEs...46 SMEs focus on HR in bid to enhance the qualifications of their employees...48 Companies to be aware of in the offshore industry...51 Naval architects embarked on offshore industry...53 Tresu carries out its ambitions - with a vengeance...54 Delivery to industries with no room for errors...55 FPSOs a success for Worldtech...56 Pressure on Sihm Højtryk...57 Health, Safety, Environment and Quality (HSEQ) Targeted effort to strengthen HSEQ...74 Offshore safety legislation a quiet revolution...78 Offshore industry contributes to reducing Denmark s energy consumption...80 Watchword: zero...82 Experts on safety...84 Personnel tracking concept ready for commercialising...88 CMS3 because practice makes perfect...90 Network Groups...92 courses...94 projects: Offshore Energy...98 Introducing plastic composites as a supplement to steel constructions Surveillance and tracking of personnel on offshore installations Crisis Management System (CMS3) Project Danish offshore oil and gas goes international Decommissioning Mono Tower Focus on Danish offshore - Development of human resources Energy effective Danish oil and gas production and Danish SME environment competences POWER Cluster Small and Medium sized Enterprises in the Offshore Wind industry (SMEOW) Members OFFSHORE WIND POWER Oceans of oppertunities...60 More power from the sea...62 Efficiency of energy production at sea improved...64 Horns Rev 2 put into operation...66 Experiments in the Baltic Sea...68 Vestas fights back at sea...69 A helping hand for the Germans...70 Speed-dating for Offshore Wind people

6

7 OFFSHORE CENTER DANMARK Energy research - offshore as well By Minister of Science, Technology and Innovation Helge Sander (Denmark s Liberal Party) The world s reserves of fossil fuels are running out. According to the most recent estimates Denmark will cease to be selfsufficient with oil in 2018 and with gas in Furthermore, we are facing a climate challenge that causes a pressing need for developing new, sustainable technologies and solutions. We cannot simply carry on as we currently do and expect that the energy system will be sustainable tomorrow. The phasing-out of fossil fuels must happen in the most energyefficient and environmentally responsible way possible and the income from fossil fuels must help finance research and innovation within the sustainable energy of the future. Offshore energy - an important piece of the puzzle The offshore sector is of great significance to Denmark. We have a long-standing tradition for exploiting and seeing potential in the large seas that surround us. Through the 1980s and 1990s extraction of oil and gas has made it possible for Denmark to be self-sufficient with energy. This has had a crucial significance in terms of our growth and welfare. But we have to pay attention to how the knowledge that has been amassed in the offshore sector can be exploited in future. The Government prioritizes green research and innovation highly - not least in the energy field. As part of the energy agreement from February last year it has been decided that funds for energy research, development and demonstration are to constitute 134 million in In connection with current negotiations about next year s budget the Government proposes new grants of around 94 million in total over the next three years for green, strategic research. Among other things grants have been awarded for research and innovation activities in connection with offshore energy, and several wind and wave energy projects in the offshore sector have been supported financially already. There is no doubt that offshore wind and wave energy constitute enormous energy reserves, but there are great challenges as well when it comes to exploiting these energy reserves in an economically sustainable way. For instance it is twice as expensive to install wind power off shore as it is on shore. In terms of wave energy the great challenge is to develop a wave system that will be able to withstand nature s gigantic forces and also deliver sustainable energy in an efficient and stable way. Green research and innovation efforts Our goal is that Denmark should develop into an international centre for green research and innovation. Therefore, the Ministry of Science, Technology and Innovation has just published the paper Green Research - Status and Perspectives that charts significant green research fields and attempts to outline future research and innovation efforts. Overall research and innovation efforts are necessary not least to develop sustainable alternatives to fossil energy sources, and here offshore activities will be an important piece of the overall puzzle. They will provide the notion of our old shipping nation with new meaning - an updated version with notable, green-energy nuances. 7

8 Danish Oil and Gas Production Year Oil Gas Installed Offshore Wind MW In the Danish pavillon at the World Exhibition in China 2010 you will meet a main character in a well known Danish offshore adventure. Also in future one will come across Danish offshore expertise in countries far away WorldWide Danmark 8

9 Facts about Danish offshore oil & gas and offshore wind An offshore fairy tale based on tradition, knowledge and open minds OFFSHORE CENTER DANMARK Since the 1920s land oil wells could be seen in Europe. It was not until the 1960s that exploration in the North Sea really begun, without success in the early years. The Danish Underground Consortium (DUC) was the first to find oil in the North Sea with their 1966 Anna discovery. Since then, new oil and gas reservoirs have been discovered frequently. The subsequent development of the North Sea is one of the greatest investment projects in the world. Denmark was a pioneer in developing commercial wind power during the 1970s. The first offshore wind farm in the world was built in Vindeby (south Denmark) in Since then, more and more wind turbines are being erected offshore. Denmark is currently the leading nation when considering offshore wind capacity per inhabitant. The following section presents facts and figures for the current status of the Danish offshore sector - oil and gas as well as offshore wind. Figures are from 2009 and yearly fi gures are for the year 2008 Offshore Oil and Gas In 1993, the amount of oil produced in Denmark reached a level equivalent to the demand. In 2000 it was twice the size of the demand Denmark is expected to be self-sufficient in oil production for at least another years Approximately half of the government finances come from oil & gas production No. of employees in the Danish offshore oil & gas industry: 13,000 The total estimated value of Danish oil and gas production in 2008 is 9 billion Yearly oil production: 16.7 million m 3 (287,510 bbl/day) Yearly gas production: 9.9 billion Nm 3 (953 million cf 3 /day) No. of production wells: 283 No. of water injection wells: 213 No. of gas injection wells: 23 Oil reserves: 214 million m 3 (1.060 billion bbl) Gas reserves: 62 billion Nm 3 (2.165 tcf 3 ) Total production of oil: 331,500 mio. m 3 (2.08 billion bbl) Total production of gas: 193,078 mia. Nm 3 (6.9 tcf 3 ) Denmark is the 38th biggest oil producer in the World measured in yearly bbl Denmark is the 20th biggest oil producer in the World measured in yearly bbl per inhabitant Offshore Wind No. of employees in the Danish wind industry: 28,400 Turnover: 11.3 billion Export: 5.6 billion (7.2% of the total Danish export) The generation of Danish wind power is equivalent to roughly 21% of the Danish electricity consumption. Almost one fourth of installed capacity is located offshore. A total of 632 MW (distributed among 305 turbines, clustered in 9 wind farms) is installed in Danish waters By 2012, the Danish offshore wind capacity will be tripled an amount corresponding to 12% of the Danish electricity consumption. Spatial planning performed by the Danish Energy Agency have identified capacity for 4.6 MW (corresponding to 50% of the Danish electricity consumption). 90% of all installed offshore wind turbines (world wide) has been delivered by Danish manufacturers. 9

10 OFFSHORE CENTER DANMARK 10

11 OFFSHORE CENTER DANMARK national knowledge and innovation centre The centre continuously gathers and coordinates knowledge and initiates development projects The production of oil and gas from the North Sea is one of Denmark s largest industries and Denmark has been self-sufficient with energy since the mid-1990s. Over recent years, however, energy from offshore wind turbines has developed concurrently and contributes significantly to Danish energy supply. The expertise achieved in oil and gas production and offshore wind energy over the years is gathered by Offshore Center Danmark. Since 2003 the centre has been the national knowledge and innovation centre for oil and gas extraction and offshore wind energy and has been supported by, among others, the Ministry of Science, Technology and Innovation. The centre coordinates projects and invigorates networks in the industry by launching a range of projects and on a continual basis invites people to conferences organized to strengthen the offshore sector. In November last year Offshore Center Danmark and the joint European POWER Cluster organization organized cooperation about, for instance, an international forum with the title Offshore Business2Business Event, where companies and interest groups from 6 nations discussed cooperation on European wind energy. The centre has initiated a number of development projects in the field of oil and gas with participation of companies and research institutions. Today has 220 members, many of which work with consultancy, design, production and safety. has taken many initiatives during recent years. We might mention a joint development project for tracing personnel at sea, challenges relating to safety posed by accessing offshore wind turbines from small vessels, profiling of small and medium-size companies as suppliers to the industry, technically advanced problems such as erosion of the sea bed around foundations for offshore wind turbines and many other projects. The operators in the North Sea and many other suppliers in the industry have development departments themselves and put in a great effort to develop new methods for improving the efficiency and exploitation of existing energy resources. Offshore Center Danmark s role is to gather, coordinate and communicate this expertise and knowledge, and the centre takes initiatives that benefit the entire industry, says Peter Blach, Director of. All companies related to the offshore industry can become members of Offshore Center Danmark. Read more about the advantages and options that you have when you are a member of at 11

12 OFFSHORE OIL & GAS Oil and gas a necessary source of profit and jobs Danish offshore activities safeguard Danish jobs and balance of payments Since the early 1970 s oil, and later natural gas, have been extracted from the Danish part of the North Sea, and the oil and gas industry has gradually become one of Denmark s largest industries as regards turnover. The production of oil and gas from the Danish part of the North Sea has thus not only ensured that Denmark is self-sufficient when it comes to energy; the oil and gas industry contributes significantly also in terms of the national economy. The high oil price during the first half of 2008 ensured that Denmark once again earned billions on extraction of energy. The level of exploration and development was also high. There s no doubt that things are going well in the Danish offshore industry was the year with the greatest profits ever from oil and gas for the Danish Government. In addition to the production itself, there are activities also in terms of putting down cables, pipelines and so on, so it s hard to be anything but optimistic, says Anne Højer Simonsen, Deputy Director General from the Danish Energy Agency. In millions m³ oil were produced, corresponding to 105 million barrels plus 9,876 Nm 3 natural gas. According to the Danish Energy Agency, the Danish Government earned profits of just over 4.8 billion from taxes, duties and profit sharing of the production in the North Sea, corresponding to around 65% of the companies total profits. The value of the Danish production is 9.0 billion. Production from the North Sea is very inportant to the balance of payments; it was improved by 3.57 billion due to profits from the oil and gas industry. Since the price of oil peaked in 2008, it has fallen markedly and then stabilized. Therefore, the Government still expects significant profits, and the Danish Ministry of Taxation estimates that the Government s profits from the production in the North Sea will be around 2.68 billion each of the Getting energy from water - water specialists for more than 40 years ANNONCE Data collection Metocean modelling Response modelling Model testing Metocean monitoring 12

13 coming 3 years if the price of oil is USD 60 a barrel. When it comes to both the economic perspective and the perspective in terms of energy, the oil and gas industry will play an important role several years ahead. As Denmark has become self-sufficient with energy, the oil and gas industry has seen incredible growth. Many jobs have been created, a growing number of small and medium-size companies have now a good foothold in the industry, and Danish expertise in extraction of oil and gas under difficult conditions is in demand internationally. This is important to remember, observes Peter Blach, Director of Offshore Center Danmark. We know that in time the Danish energy reserves in the North Sea will be reduced. But neither today nor in the near future we will be able to do without oil and gas. Therefore, we must continue to establish new, exciting research projects, small and medium-size companies must be motivated to work in the oil and gas industry, and we must continue to make sure that young people possess knowledge that can be used in the oil and gas industry. It would be natural to spend part of the money earned in the oil and gas industry for Danish society to future-proof industry, adds Peter Blach. It is evident that it is not only the activities in the North Sea that contribute to strengthening the Danish oil and gas industry. Danish know-how is in demand globally, and, according to Anne Højer Simonsen from the Danish Energy Agency, the small and medium-size companies are a great advantage for the sector. Danish companies are actually some of the best in the world when it comes to for instance setting up platforms and installations, and we must exploit this to brand ourselves abroad; not least is it exceptional that a large number of small and medium-size companies with niche products constitute an important part of Danish offshore industry. Danish companies may not be as large as such companies are in other oil-producing countries, but they are good at cooperating even better than people are used to in other countries, says Anne Højer Simonsen and adds: I also believe that an important transfer of knowledge is going on from oil and gas to other offshore energy sources, and here we have some advantages. The whole supply chain works, and every single company feels that it s a part of it. We can install, operate and maintain things. That is an advantage. 13

14 OFFSHORE OIL & GAS Great investments in exploration and development In million were invested in development and optimization of oil fields in the North Sea Great amounts of money are still being invested in exploration of new oil fields and in development of existing fields in the North Sea. According to a statement from the Danish Energy Agency, 825 million were invested in development and optimization of installations in In total, 14 new wells for extraction plus 1 water injection well and 5 appraisal drillings were drilled in One of the appraisal drillings has subsequently been converted into a production well. So things are still busy in the Danish part of the North Sea. Extraction of oil from the Danish fields peaked in 2004 and won t reach the same level in future. But the rumours about the imminent death of Danish oil and gas extraction are grossly exaggerated. Among other issues, this is evident, because production in 2008 was higher than the prognoses put forward only a few years ago. Therefore, large amounts of money will be invested for yet several years in order to optimize continually the fields in the North Sea. For the same reason assessments are constantly changed depending on the period it will be possible to exploit deposits in the North Sea, explains Director Peter Blach, Director of. Plenty of activity Maersk Oil is not only the biggest Danish operator in the North Sea but also the largest investor in development and optimization of fields. Investments through recent years have prolonged the prognoses for Maersk Oil s installations and the Maersk Group expects to exploit their concession in the North Sea until it expires in Naturally a gradual phasing-out will happen - probably from the mid-2020s. But oil production will still be necessary - also after So there s a lot of activity in the industry - not least in relation to maintenance The Halfdan fi eld is one of the several fi elds that have been expanded in the Danish part of the North Sea in recent years. Photo: Maersk Oil and redevelopment of existing installations, explains Director Michael Engell- Jensen, Maersk Oil s division Carbon & Climate. After the most recent concession round 29 holders of concessions are represented in the Danish part of the North Sea. Some of these expect increased activities in the coming years. Thus Hess Danmark has applied for permission to expand the Syd Arne field that they operate in cooperation with DONG Energy expects to initiate production from the Hejre field in Self-sufficient for many years Denmark is not just the only EU member that is self-sufficient with energy; the country also has a net export of energy. This will remain true for some years, even though this status will come under pressure in the coming years when oil production will be dropping. The Danish Energy Agency s latest prognosis indicates that by the help of known deposits Denmark will be able to uphold its self-sufficiency in terms of both oil and gas for 10 years - and for a further 10 years by 14

15 OFFSHORE OIL & GAS Expansions of Danish offshore installations in the North Sea in 2009 The level of investments relating to development and improvement of installations has been around 800 million a year based on figures provided by individual concession holders. This is a selection of current developments and approved expansion plans. Further development of the Tyra field and development of the Adda field On October 6, 2009 Maersk Oil and Gas applied for approval of a plan for further development of the Tyra field plus approval of a development of the Adda field. The company applied for permission to drill a new well by means of existing slots from the Tyra East B installation. The well is supposed to go through reservoirs in both the Tyra and the Adda fields. Total production from the well has been estimated at 1.2 billion Nm3 gas and 1.2 million m 3 of oil 84% from Tyra and 16% from Adda. The Siri field In the Siri field 2 new oil production wells have been drilled by the help of the drilling rig Ensco 70. The well SCA-12C is placed on the southern flank of Siri while the well SCA-3C is located near the former SCA-3A in the western part of the field. Both wells produce from the sandstone reservoir in the Heimdal formation. Development of the Syd Arne field On May 25, 2009 Hess Denmark applied for approval of stage 1 of the third phase of the further development of the Syd Arne field. The company applied for permission to establish and produce oil from a further 2 wells. Costs related to the approved wells, that are expected to be drilled in the spring 2010, will amount to 113 million, and production from the wells will constitute around 1.11 million m 3 of oil and 0.33 billion Nm3 of gas intotal. Further development of the Tyra field and development of the Adda field On October 6, 2009 Maersk Oil and Gas applied for approval of a plan for further development of the Tyra field plus approval of a development of the Adda field. The company applied for permission to drill a new well by means of existing slots from the Tyra East B installation. The well is supposed to go through reservoirs in both the Tyra and the Adda fields.total production from the well has been estimated at 1.2 billion Nm 3 gas and 1.2 million m 3 of oil 84% from Tyra and 16% from Adda. The Halfdan field, including Sif and Igor In the North-Eastern part of the Halfdan field the drilling rig Ensco 71 has drilled 4 wells in a spiral pattern. The 4th phase of the Halfdan expansion was approved in June 2008 and includes the building of a new installation, HBD, with a system for processing of liquid and gas production. Capacity will be 240,000 barrels of liquid (38,200 m 3 ) a day and separation of 80,000 barrels of oil (12,700 m 3 ) a day. The new system s gas separation capacity will be 6.7 million Nm³ per day. Further development of the Halfdan North-east field On December 18, 2008 Maersk Oil and Gas applied for approval of a plan for further development of the Halfdan North-east field. The company applied for permission to establish and produce from a further 2 double-lateral gas production wells. Costs related to the approved wells, that are expected to be drilled in the spring 2010, will amount to around 82 million, and production from the wells will amount to around 0.97 billion Nm 3 gas and 0.08 million m3 of oil. Further development of the Valdemar field On October 8, 2008 Maersk Oil and Gas applied for approval of a plan for further development of the Valdemar field. The plan involves the drilling of 3 new wells by means of existing slots. The drillings are expected to be carried out in 2010 and are estimated at 140 million. Production from the wells has been estimated at 1.7 million m 3 of oil and 0.8 billion Nm 3 of gas. Up-to-date overview of applied-for developments of installations in the Danish part of the North Sea at using innovative extraction technology and from exploration. One of the fields with the greatest potential is DONG Energy s Svane field. More than 100 billion Nm 3 of gas can probably be extracted from this field, corresponding to years consumption of natural gas in Denmark. The Svane field alone will be able to influence Danish gas supply for many years but it s still not certain if the field can be exploited at all. The gas there is to be found very deep down and it will be difficult to exploit and expensive. But a bird in the hand is worth two in the bush, and only in a few years will we have a better idea of exploitation opportunities. If the field is exploited, it will influence Denmark s status as a country that is self-sufficient with gas, says Anne Højer Simonsen, Deputy Director General from the Danish Energy Agency. International focus However, Danish companies do not focus only on the North Sea. As experience from Danish fields grow, companies can compete internationally and in the coming years more and more Danish companies will engage in projects abroad. Here the expertise from Danish fields will ensure optimum exploitation of fields that are difficult to gain access to for instance in Asia, the Middle East, West Africa and Brasil. Over the years, Maersk Oil has strengthened its international engagement significantly and today the company is represented in among other countries Qatar, Kasakhstan, Nigeria and Angola, a series of Middle East states as well as in Brasil, and this includes a range of sub-suppliers. Being in the offshore industry is also a global career; in Britain they conduct half of their activities abroad through alliances and purchases. And it must be possible to create a foundation for running a business. It s simply a question of not accepting limitations, observes Michael Engell-Jensen. 15

16 OFFSHORE OIL & GAS Ceramic spheres help extract oil New technique has in the course of few years contributed to make the Valdemar field the 3rd largest producing oil field in the North Sea New finds and new, improved methods for exploiting fields that are difficult to gain access to each year postpone the date when Denmark will not be self-sufficient with oil and gas. Recently Maersk Oil succeeded in exploiting deposits in the lowermost, tight layers at the bottom of the Valdemar field in the North-Eastern part of the Danish fields. Only 10 years ago it seemed almost impossible to economically exploit these deposits that exist in very soft, plastic chalk layers where wellbores collapse and are ruined. However, a new technique has contributed to make it possible to exploit the deposits, and today Valdemar is the 3rd largest field in the Danish part of the North Sea. We know from experience that chalk layers are difficult to work with but these soft and clay-rich reservoirs below the traditional chalk reservoirs have been significantly more difficult to exploit. Permeability is down to around 0.1 md or 1/10 of the traditional chalk fields, so it s a scoop that today we re capable of producing 3,974 m 3 (25,000 bbl) a day. It s a success story but it has taken many years to come this far, says Philip Wodka, Maersk Oil. In 2006 we established two installations at Valdemar AB and BA and until now 12 of 14 wells have been drilled in these lower clay-rich chalk layers that have given us a great deal of trouble for many years in terms of exploitation. We tried at the beginning of the 1990s but we had many problems and many failures. Now we have found a method that we use successfully to exploit the field. Ceramic spheres in the underground The challenge has been to maintain the artificial fractures where oil can run through to the wellbore during production. Until now wellbores have collapsed, but by inducing high conductive fractures and amongst others filling them with ceramic spheres ( proppant ) of controlled sizes it has been possible to get hold of the oil. The use of ceramic spheres is a technique that Maersk Oil is using for the first time. If you increase the pressure up to the fracture gradient, cracks will appear and to avoid formations closing again we traditionally have pumped sand into the cracks. We have now had success replacing the sand with ceramic spheres in the cracks. Even if cracks partially close, there will be enough room for the oil to run through because the ceramics are strong and will leave voids between them, explains Philip Wodka about the technique. Still then, an important aspect of the success is also a managed production strategy, where the pressure drop that these ceramics propped fractures are exposed to is strictly controlled to minimize the risk of mobilizing the ceramic spheres and producing them into the wellbore. In case the spheres are mobilized, the fractures would close near the wellbore and not allow production. Other contributing factors to the success is the use of seismic information to place the wells and induce the artificial fractures outside naturally faulted regions which are known to cause wellbore stability problems. In the Valdemar fi eld Maersk Oil has been successful in extracting oil from an area that was thought to be impossible to exploit 10 years ago. This is a photograph of the most recent expansion of the fi eld and further expansions are being considered. Expected degree of exploitation The degree of exploitation of Valdemar is 7% today but Maersk Oil is pursuing studies of enhancing recovery by among other things water injection. To me, Valdemar shows how we originally asked ourselves: how on earth will it be possible? It was truly a long shot, but we succeeded. So if you need to have your morale boosted before venturing into projects that seem to be completely insurmountable, Valdemar is a very good example of the fact that you may succeed anyway. Our motivation is, of course, a question of an opportunity to make an economically profitable project, but we also feel a commitment to exploit existing resources in an optimum fashion, says Philip Wodka. The tight clay-rich reservoir below the traditional chalk in the Valdemar field is expected to be active for another 20 years. Studies are ongoing to mature furthers wells in similar reservoirs in the nearby Tyra, Adda and Boje. 16

17 The world needs flexible energy solutions We create value through integrated solutions benefiting uptime, safety, energy efficiency and emissions reduction COWI is a leading northern European consulting group. We provide state-of-the-art services within the fields of engineering, environmental science and economics with due consideration for the environment and society. COWI is a leader within its fields because COWI s 6,000 employees are leaders within theirs. 17

18 OFFSHORE OIL & GAS DANISH OFFSHORE INDUSTRY The Confederation of Danish Industry is the principal industry organisation representing the companies working in the offshore oil and gas sector in Denmark. We represent the common offshore oil and gas interests of our members particularly in relation to the legislators and authorities in Denmark and the EU. We are engaged in offshore safety work, education policy, market analysis, export promotion, and other key issues for companies operating in the Danish offshore sector. Our primary goals and interests are: Improve offshore safety through the initiative Task Force ZERO Promote the common political interests of our members Be the primary networking organisation for companies operating in the Danish offshore industry Promote business opportunities in relation to potential customers, subcontractors, and partners to our members Unite and promote the common trade and markets development interests of our members For For further further information information please please contact contact Adviser Senior Adviser Senior Adviser Esben Esben Mortensen, Jens Holst-Nielsen, Danish Web. Offshore Danish Industry Offshore industry C/O Danish The Offshore Confederation Industry of Danish Mail: Industry C/O Conf. of Danish Industries 18, H. C H. Andersens C. Andersens Boulevard Boulevard, 18 Phone: DK Copenhagen 18, H. C. Andersens Boulevard, DK Copenhagen Copenhagen esm@di.dk V Fax jhn@di.dk Phone: Phone: Esbjerg Esbjerg is Denmark s offshore city. If DONG Energy is looking for knowledge of or competences in offshore, we will find both in Esbjerg. Niels Bergh-Hansen, Executive Vice President, DONG Energy. Offshore energy! Esbjerg Denmark s natural offshore and energy technology centre Esbjerg is the offshore industry centre in Denmark and the soon-to-be centre for energy technology. The city has a large cluster of companies working closely together with a strong training and research environment. Already today there are 8,000 workplaces in the offshore industry in Esbjerg Municipality and, in the coming years, several hundred million Euro will be invested in infra structure, research and development. Esbjerg Please contact Esbjerg Business Development Centre on (+45) if you would like to know more about new energy technology in Esbjerg! 18

19 OFFSHORE OIL & GAS Future lies in deep waters Maersk Drilling has made targeted investments in deep water drillings The future lies in deep waters because, as easily accessible oil and gas fields are drained, focus on deeper waters becomes stronger. The renowned British market analyst John Westwood from Douglas-Westwood Ltd. is among those who consider that increasing energy consumption in China and India will make the price of oil go up, making attractive exploration of oil fields in deep waters to which it is more difficult to gain access. John Westwood considers that total investments in drilling for oil and gas in deep waters will increase worldwide from a two-figure billion sum to a three-figure billion sum in Euros in Among the companies that consider deep water drillings business areas is Danish Maersk Drilling. There s a lack of oil in the world and oil companies must find new fields to keep up with consumption. As companies are having to move farther out to sea to find oil, the market for deep water equipment grows, and where there s growth that is where we should be, says Martin Fruergaard, Maersk Drilling. Therefore, the company has invested in 3 DSS 21 deepwater rigs built at the Keppel FELS Shipyard in Singapore. The first rig was named Maersk Developer and was placed in the Mexican Golf in June 2008, Maersk Discoverer was sent to carry out an assignment in Australia in the autumn 2009, and the 3rd one is supposed to be sent to West Africa or Brasil when completed at the shipyard in the latter half of These units are substantially larger and technically far more advanced than existing rigs operating in this segment. A number of innovative features have been implemented in the design, which will increase the safety of our crew and make the rigs considerably more efficient, says Martin Fruergaard. In addition to possessing some of the most efficient drilling rigs on the market, Maersk Drilling has focused greatly on improving the environment on the rigs in terms of noise reduction, air condition and a high degree of automated procedures. 19

20 OFFSHORE OIL & GAS Storing of CO 2 new business area in North Sea Maersk Oil in full swing with commercializing Carbon Capture and Storage Climate change has put emission of CO 2 on the global agenda, and in Denmark a range of initiatives have been initiated to reduce CO 2 emissions from offshore installations in the North Sea. Efficiency improvement and energy-saving measures are to reduce CO 2 emissions in general but Maersk Oil also views Carbon Capture and Storage CCS as a possible business area. Since 2008 Maersk Oil has worked with opportunities for CCS and expects to have a business plan ready in The concept is based on the fact that, within few years, it will be required by law that all power plants must collect CO 2 to ensure that it is not released into the atmosphere. This will entail international demand for storage options and Maersk Oil has the advantage that the company has several oil fields in the North Sea with room for storaging years production of CO 2. In any event there s a potential for not doing anything. But opportunities for commercializing CCS will depend on 2 equally important factors: whether it ll be possible technically to decide where the CO 2 is supposed to come from today transport over land isn t allowed and to be able to define a set-up that meets relevant requirements from authorities, says Michael Engell- Jensen, Senior Vice President of Maersk Oil s Carbon & Climate - a recently established department of Maersk Oil. Begins in the next decade Maersk Oil has initiated a feasibility study that is expected to be completed in 2010, and Michael Engell-Jensen believes that storaging CO 2 in the North Sea will be possible from the middle of the next decade. Thus Maersk Oil will then be in a favourable position by being among the first on the market. However, they have one more advantage: the CO 2 that Maersk Oil is paid to dispose of can be used for increasing the degree of extraction from active oil fields. By injecting drillings, CO 2 is mixed with oil. This means that, in addition to creating increased pressure, CO 2 makes the oil more fluid. This effect will make a difference. The essence of this is that CO 2 can extract oil that water can t. When injected Studies from abroad indicate that CO 2 can be stored safely in the underground as long as a range of preconditions are met: CO 2 is compressed and pumped down into porous layers of sand or empty oil or gas reservoirs. Storage must be at depths of more than 800 m where CO 2 will liquefy. Storage must happen under impermeable layers of clay that will prevent CO 2 being released into the atmosphere. Optimum conditions for storage of CO 2 exist in many places in the world both off shore and on shore. Government-owned Norwegian Statoil has since 1996 sent CO 2 back down the underground in some sandstone layers in the Utsira formation 1,000 metres below the seabed in the Sleipner field in the North Sea. The Utsira formation is around 400 x 100 km large and, until now, only a small part of it has been filled (around 4 x 3 km). It is estimated that 10 million tonnes of CO 2 has been pumped down into the underground since (Source: GEUS). water becomes tired and cannot increase exploitation further, then CO 2 can extract 5-15% more of the oil that s there. In this way exploitation becomes a third better, explains Michael Engell-Jensen. Economy most important factor In addition to having storage options, production in Danish oil fields can be strengthened significantly, which makes it especially interesting for Maersk Oil to engage in CCS. We ve already come far in our initial studies together with our partners Shell and Chevron, for instance in terms of cost, and we ve come very far with quantifying cost. What will happen with CO 2 storage will probably be the same as with all new extraction projects: we ll begin where we expect that it will be easiest to begin, and then deal with the more difficult fields later on. One of the greatest challenges concerning CCS is transport of CO 2. Amounts will be so great that transport by ship would be cumbersome and establishing a net of pipelines between power plants and the fields in the North Sea would be very costly. Therefore, Maersk Oil are working on various solutions. Furthermore, CO 2 is highly corrosive in connection with salt water, and to avoid corrosion of installations in the North Sea, it may be necessary to replace large parts of current installations. Maersk Oil is considering doing this. We ve come very far in our considerations. It s no longer a question of whether it will be possible; the economy is the most important factor. But the extraction potential is significant. Several fields will have a renaissance, although we won t achieve a new, great output. Rather, we ll stop the fall in output instead of seeing a downward trend, says Michael Engell-Jensen. 20

21 OFFSHORE OIL & GAS Preparing 1:1 project In order to assess specific opportunities and challenges, Maersk Oil will, in the course of a few years, establish a demonstration phase where the technique will be tested on a 1:1 scale. CO 2 will be captured, transported and stored and Maersk Oil has therefore entered into a dialogue with a series of power plants in the EU about cooperation. At the same time Michael Engell-Jensen is facing the task of convincing his own management in the A.P. Møller Maersk group that CCS can actually become a new and large business area that can gradually replace the significant income from extraction of oil and gas in the North Sea. Understanding is growing that this will become mainstream in our organization. Scepticism has changed into optimism, the project has moved on, and there s now more enthusiasm. We believe in the idea but as always when you are trying out new things, we ll have to define a succes criterion, and then we ll have emergency exit 1,2 and 3, says Michael Engell-Jensen. SFF Denmark Måde Industrivej 32, Postbox 205, 6705 Esbjerg Ø, Denmark PH FAX salesdk@sffgroup.com PRODUCTS Pipe, Fittings & Flanges Bolts & Gaskets Modular Valves Mechanical Joints Compact Flanges Anchorflanges Flanged Outlets Spade, Spacers, Spectacle Blinds Subsea Piping Linepipe Components Special Items Bearings SERVICES Storage Distribution Project Management QA/QS Expediting/Inspection Engineering support Design Verification & Optimization Material Selection Head office: Norway, Sandnes Branches: Norway Sweden Denmark Finland Latvia Canada Italy Singapore Australia Indonesia Malaysia Kazakhstan 21

22 OFFSHORE OIL & GAS Noreco busy doing experiments Noreco busy finding oil where large oil companies are not looking Belief in the future is so great in the Norwegian-owned oil company Noreco that since their foundation in 2005 they have intensified their hunt for oil in the North Sea - not least after the purchase of Danish Altinex in The company focuses on assessing fields that larger companies have not taken an interest in and their efforts have been fruitful. Until the end of 2010 NORECO expects to drill 30 assessment wells, and several of those that have been drilled until now have already provided results. Noreco s production figures have thus grown significantly - for instance after finds in the Norwegian fields Brage, Gygrid and Gita in the Danish part of the North Sea. A long-term production stop in the autumn 2009 in the Siri field due to cracks in some sub-sea constructions has temporarily influenced production figures. However, this does not change the fact that the offshore industry is now blessed with a busy and tenacious little brother whose goal is to double production inside three years. In our minds the Danish sector has a future, and that goes for the rest of the North Sea as well. There are geological signs of traps containing oil and gas that have not yet been tested. So production may well have peaked in the North Sea but that won t stop us searching for new finds and we aren t yet near the ending. We see opportunities to exploit untrapped geological structures in both the Danish part of the North Sea and in the rest of the North Sea, explains Scott Kerr, CEO, Noreco. What can we add to the equation? The Danish department in Holte North of Copenhagen is the centre of expansion of activities in the Danish and British part of the North Sea plus the most Southern part of the Norwegian section. The company has 54 exploration licenses in total and, in cooperation with for instance Hess and DONG Energy, the company has been busy looking for new deposits. This is based on the company s fundamental philosophy of being different from other oil companies in the North Sea. At the beginning it was a strategic choice to be a minor partner. But what could we do as a small company? How could we bring value to the oil and gas industry? We felt a strong need to focus on where we could add value to the offshore industry, and our core competence is subsurface installations. Therefore, we wanted to be known as a partner who could bring expertise in subsurface and geological surveys into the business. Later on we added our high safety standards and, though we aren t the largest operator, we have exceptional skills. Not worried about the future Thus Scott Kerr is not the least worried about claims that the oil adventure is at an end. On the contrary - the adventure has just begun for this upcoming company, and what is important to Noreco in the coming years is to differentiate themselves even more from other oil companies. They can do this by the help of their ability to exploit fields that other companies have given a low priority by experimenting with and using Noreco s professional competences. Compared to what we could do 30 years ago with the technologies we utilize todayit s amazing! Any suggestion that we won t be able to do it again is wrong and shortsighted. Of course we will, and the offshore industry is one of the industries that s best at implementing new technologies. I m sure that this will remain true, emphasises Scott Kerr, and adds: Some technologies and methods are too expensive or too complicated to use for increasing finds - and others aren t. The costs of rigs and seismic studies are the same but they can be used more efficiently and aren t necessarily high-end technologies. It s also possible still to increase finds by reducing 22