Statoil Cancels Contract with COSL Pioneer, Mixed Picture for Norway

As Statoil decided to cancel the contract with COSL Pioneer some 13 months before the expiry date of August 2016, a mixed picture for the Norwegian gas industry emerged on Wednesday.

On the one hand, Lundin Petroleum’s subsidiary commenced the drilling of three wells. 

‘Lundin Norway AS (Lundin Norway) has commenced the drilling of its second Alta appraisal well in the Barents Sea South and the drilling of an appraisal well on the Edvard Grieg field in the Norwegian North Sea. Drilling has also commenced on the partner-operated Zeppelin exploration well in the southern North Sea’ reads a note released on Wednesday. 

On the other hand, as said, Statoil, which suspended the contract with COSL Pioneer since 8 October 2014, did not find alternative activity for the rig during the intervening period. Therefore, it decided to cancel the contract. 

“COSL Pioneer and its crew have demonstrated a good safety culture and delivered efficient drilling operations to Statoil. Cancellation is a consequence of overcapacity in the rig portfolio” supply chain senior vice president Jon Arnt Jacobsen commented on Wednesday.

At the same time, the Norwegian Petroleum Directorate wrote that Suncor Energy Norge AS has concluded the drilling of exploration well 25/10-13 S, and that the well is dry. 

All in all, though, the picture is not that gloomy. Figures published on Wednesday suggest that gas production in Norway was as expected. Preliminary figures say that production was higher than in April 2015, and higher than May 2014 too. 

‘The total petroleum production for the first five months in 2015 is about 94.0 million Sm3 oil equivalents (MSm3 o.e.), broken down as follows: about 37.1 MSm3 o.e. of oil, about 9.2 MSm3 o.e. of NGL and condensate and about 47.7 MSm3 o.e. of gas for sale. The total volume is 2.0 MSm3 o.e. higher than for the same period in 2014’ the Norwegian body wrote on Wednesday.