The door to the Middle East for many Norwegian companies has been opened through INTSOK, the Norwegian Oil and Gas Partners, established jointly by the Norwegian oil and gas industry and the Norwegian government in 1997. Working with member companies to expand their business activities and to match their expertise with local requirements, INTSOK assists in establishing a supply chain that takes into account all aspects of the process – from surveying to project development to final delivery.
Spotlight on Iran
The Norwegian oil and gas cluster is well represented in Iran, with approximately 50-60 companies currently involved in the oil business there. Given Iran’s lofty status in the branch – amongst the top five countries in the world with regards to both oil reserves and gas reserves – there will naturally be a great deal of industry activity here for decades to come.
Norwegian representation in Iran has increased dramatically over the past decade, with a major step forward taking place in 1999 when a cooperative agreement was signed between the National Iranian Oil Company (NIOC) and the Norwegian Ministry of Petroleum. This opened the door to companies such as Fugro-Geoteam and Global-Geo Services (GGS) as they began to undertake reconnaissance of various regions in the country – with excellent results.
Norsk Hydro is actively exploring oil and gas projects throughout Iran.
INTSOK has been instrumental in helping a number of Norwegian member companies looking to do business in Iran, providing guidance and country-related industry information. This list includes Norsk Hydro, Statoil, MULTICONSULT and Aker Kværner.
Major Players, Major Projects
The Norwegian oil and gas giants Hydro and Statoil both have a history of success in Iranian oil operations. In April 2000, Hydro signed an exploration service contract for the Anaran block, on the edge of the Iran-Iraq border, calling for a 720-km 2D seismic survey and the drilling of five wells. Then, in the summer of 2005, the first successful well was completed and tested at the Azar structure, proving a very promising oil discovery. A second exploration well is now being drilled in the Changuleh West structure.
Other areas of Hydro involvement have included a successful bid for a combined exploration and development contract for the Khorramabad block. As of this writing, the finalizing of this contract is being processed by NIOC. Hydro’s general business development in Iran has focused on oil exploration in an initial phase, but the company has a business philosophy that is open to including other commercially viable oil and gas projects.
South Pars – The World’s Largest
Statoil is a key player in the development of the world’s largest gas field, under an agreement signed with local partner Petropars and Iranian authorities in 2002. The massive South Pars field covers the Iranian sector of the Persian Gulf, and is to be developed in 25 phases. Statoil is responsible for the development of phases six through eight of the field. When fully operational, South Pars will produce an estimated 650 billion cubic metres of gas and 700 million barrels of condensate.
A challenging undertaking even for Statoil, the project encompasses the building of three production platforms installed by the company 100 kilometres from the Iranian coast. A 32-inch pipeline will be laid from each platform to the coast, where a gas treatment plant is being constructed by Statoil’s Iranian partner Petropars. The third and final phase will be completed in 2006, with Iranian state-owned NIOC taking over the management of the entire project once development is finalized.
Iran’s South Pars and the neighbouring Qatar North Field are roughly 18 times larger than Statoil’s North Sea Troll gas development – a development which itself currently fulfils 10 percent of Europe’s total natural gas demands.
Deepwater Drilling in the Caspian
Norwegian suppliers play a vital role in a rig project currently underway at the Sadra Yard in the Iranian coastal port Neka on the Caspian Sea. The project is a perfect example of the breadth of the Norwegian oil and gas cluster. The newly built semi-submersible drilling rig Alborz, owned by NIOC, is a GVA type with topside design from Hitec Framnæs; a drilling rig from Maritime Hydraulics; drilling equipment from O&M and Gann Mekaniske; heating, ventilation and air conditioning from YORK Novenco; and pipes and fittings from Bergens Rørhandel. The rig is also classed by DNV, with Vetco Aibel as well as Odjell involved in commissioning and operations.
Spanning the Middle East
Norwegian oil and gas companies are also active in a number of other Middle East countries – including Libya, where Statoil was recently awarded two licenses in a bidding round for exploration and production sharing agreements. The competition was intense, but the Norwegian company won the right to begin the process of seismic surveying in 2007, with plans to begin drilling of the first exploration well in 2008 at the latest.
Hydro is also actively involved in Libya’s oil and gas future, and in November of 2005 could again report success at exploration block NC186 in the Murzuq basin, the sixth commercial oil find in this block. A production test demonstrated over 4,500 barrels of oil per day with the help of an electric pump.
Norwegian competence is also playing a role in Qatar’s liquefied natural gas (LNG) newbuilding programme. The country has ordered 20 megatankers now, of which 11 are to be classed by DNV, and some of these are amongst the largest LNG carriers on order. The plan is to order up to 60 LNG carriers so that Qatar LNG can meet future delivery obligations in the United States, United Kingdom, continental Europe and Asia.
From finding new technical solutions on the Caspian Sea to improving oil recovery in the Sahara, the Norwegian oil and gas cluster is ready to take on any challenge.