Okea to develop Draugen tie-back off Norway
Norwegian independent Okea and its partners at the Draugen field off Norway have taken a decision to develop the Hasselmus gas discovery, Okea said on June 1.
Okea, Petoro and Neptune Energy plan to tie a single well at Hasselmus back to the Draugen production platform. The project will cost 2.4bn kroner ($290mn) and is expected to recover 1.65bn m3 of gas, or 10.6mn barrels of oil equivalent.
Production is slated to start in the fourth quarter of 2023 and reach a plateau rate of over 4,400 boe/day. The break-even point of Hasselmus' gas is around $28/boe or roughly $100/'000 m3.
The decision on Hasselmus is a landmark for Okea, as it will be the company's first field development as an operator. Okea's senior vice president for projects and technology, Knut Gjertsen, described the project as "financially robust."
"The temporary tax measures adopted by parliament in June last year, have ensured a timely development of Hasselmus during a period of significant market volatility," Gjertsen said.
Norway's parliament last summer agreed to provide some 100bn kroner ($10.6bn) in tax relief to oil and gas companies, to help them stay afloat and continue investing despite the coronavirus-induced collapse in prices. Operators will be able to deduct investments made in projects approved by authorities before the end of 2023 from their tax base.
The announcement also comes on Svein Liknes' first day as Okea CEO. The former Aker BP executive was appointed following the retirement of company founder Erik Haugane.
Okea, backed by private equity group Seacrest Capital, operates the licence containing Draugen and Hasselmus with a 44.6% interest, while Petoro has 47.9% and Neptune Energy 7.6%.