03/07/2006

1

Oil and Gas field development and management,

the Governments involvement

PPM Indonesia Case Study

Jakarta June 2006

Gunnar V. Søiland, NPD

03/07/2006 2

…..from today’s speaches:

….The government role is to attract foreign investors

….our goal is to increase recovery in the oil fields

….it is important to increase the production rate

….the challenge is to meet world demand for oil

BUT NOT ONLY THAT!

Hydrocarbon resources need to create

value for society!

03/07/2006

2

03/07/2006 3

Goal:

The Norwegian Petroleum Directorate will contribute to creating the greatest possiblevalue for society from oil and gas activities by means of prudentresource management, based onsafety, emergency preparednessand safeguarding the naturalenvironment

Goal:

The Norwegian Petroleum Directorate will contribute tocreating the greatest possible value for society from oil and gas activities by means of prudent resource management, based on safety, emergency preparedness and safeguarding the natural environment

Norwegian Petroleum Directorate

The NPD office building at Ullandhaug in Stavanger

03/07/2006 4

PPM Goal:

….enable government officials in the CCOP member countries…….

03/07/2006

3

03/07/2006 5

03/07/2006 6

03/07/2006

4

03/07/2006 7

Organisation of the states roleSeparation of roles and responsibilities

Policy formulation

Commercial activities

Parliament and government

Statoil, PetoroShell, ExxonMobil….. NPD, PSA

Admin/regulation

03/07/2006 8

Resource Management Aims

The petroleum resources must be managed such as to provide the best possible economic outcome for the society.

The petroleum resources must be managed within the context of an environmental sustainable society.

The oil and gas industry should be developed in a way that makes due consideration to the viable development of other sectors of the society.

03/07/2006

5

03/07/2006 9

Society vs company interest

Short term – long term

Increase oil recovery - fast income

Small/marginal fields

Joint developments

National budget

Area studies - field development plan

Transport capacity and tariffs (third party access)

03/07/2006 10

Ekofisk today Production:Olje - 360 000 bpdGass - 350 mmcfdVanninjeksjon - 900 000 bpd

Offshore-ansatte(til enhver tid): Totalt ca. 900 ConocoPhillips 350

Production fieldsEkofisk EldfiskEmblaTor

03/07/2006

6

03/07/2006 11

Water injection and production in more than 35 years

0

50

100

150

200

250

300

350

400

450

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

Production

• Successful water injection

• Successful field development

• Advanced drilling and well technology

Mboe/d

Eko I

Eko II

Water

•Almost 900 000 barrels of cleaned water is pumped into the Ekofisk reservoirs pr. day.

•This compares to daily water supply to Stavanger and Bergen combined.

03/07/2006 12

Examples of NPD involvement in Ekofisk during production

Gave limits for GOR in wellsPromoted water Injection (and gas injection)Facilitated researchRequired Extended Field StudyThreatened to close down platforms due to subsidence and condition (based on HSE)Recommended special tax conditions for water injection projectRecommended license extension for re-development

03/07/2006

7

03/07/2006 13

Reservoir Management: ”the loops”- that License Owners have to relate to

Decided recovery strategy

Well results

R&D projects ?

Budgets

Drilling program

New IOR-metodes ?

”Living” and committed

long term plan

Production experiences

Updated reservoir

model

Updated plan reservoir

management

Alternative recovery

strategies?

Technology pilots ?

New data types, 4-D seismic ?

Tie-in of additional resources

Map and find additional resources

Efforts to reduce wastes?

We need to:We need to:

1. Find more oil and gas1. Find more oil and gas

2. Commercialize marginal fields2. Commercialize marginal fields

3. Improve recoveries from existing field3. Improve recoveries from existing fieldbefore it is too late, time critical resourcesbefore it is too late, time critical resources

4. Reduce costs in all phases (e4. Reduce costs in all phases (e--field)field)

03/07/2006

8

03/07/2006 15

Hierarchy of legislation

The Petroleum Act

Guidelines to the Petroleum Act

and associated regulations

Regulations to the Petroleum Act

Legall

y bind

ing

Guidan

ce

03/07/2006 16

R&D - How can NPD make a difference?

DATAGap-analysis/knowledge

STORY-TELLERCommunication strategyBe a better story-tellerPraise good initiativ

MOTIVATORR&D in licencesFirst user /best practiceLong term strategic research

FACILITATORUnbiasedCo-operation (industry, institutions, licenses, countries)

03/07/2006

9

03/07/2006 17

Troll gas field, deep water, shallow reservoir, thin oil zones

03/07/2006 18

Troll – Oseberg Gas Injection TOGIEffect: 350 million barrels

Oseberg

Troll

TrollOseberg