Bloomberg News

Total Hild Gas Project to Stem Norway Decline as Nigeria Rises

February 03, 2012

Feb. 2 (Bloomberg) -- Total SA, the energy producer that will pump more oil from Nigeria than Norway for the first time, said a $4.2 billion plan to tap the Scandinavian nation’s Hild field will help it stem a decline in northern waters.

The field, with reserves estimated at 190 million barrels of oil equivalent, is expected to start producing at the end of 2016 and will reach a peak of 100,000 barrels a day, Europe’s third-largest oil company said today in a statement. Total has a 51 percent stake in Hild, with Petoro AS holding 30 percent and Statoil ASA 19 percent.

Total produced 310,000 barrels of oil equivalent a day in Norway in 2010, making it the company’s biggest single producer. This will change as early as this year as output from mature fields drops and production increases from Nigeria, Total’s second-biggest source.

“We are investing to maximize production at existing fields, develop new fields, and in exploration,” said Patrice de Vivies, senior vice president for Northern Europe, Exploration & Production. He put Norway output at 250,000 to 300,000 barrels of oil equivalent a day over the next decade.

Total’s Norway output has fallen from 372,000 barrels of oil equivalent a day in 2006 while output from Nigeria, Africa’s top oil producer, has risen since then, to 301,000 barrels a day in 2010. Total expects Nigeria’s offshore Usan field to start producing this year.

Hild Revisited

Hild, first discovered in 1978, has been revisited by Total with improved seismic data and more complex horizontal drilling, de Vivies said in an interview in Paris Jan. 27.

“There are quite a few prospects around Hild,” de Vivies said. “This new hub in Norway can serve these and allow us to maintain lasting production.”

Total, ConocoPhillips and partners last year started the $12 billion development of the Ekofisk South and Eldfisk II projects, also in the Norwegian North Sea, to tap around 450 million barrels of oil equivalent of reserves. Output from the fields, first discovered in 1969, is expected in 2014 and 2015.

Total will invest about $5.5 billion in the Ekofisk zone, de Vivies said. Spending in Norway will rise to about $2 billion a year in the next five years from an annual $1.5 billion. The explorer has stakes in about 79 producing Norwegian fields.

Total is also drilling wells on exploration permits. The company said in August it struck gas at the Norvarg license which it operates in the Barents Sea, boosting prospects that the Arctic region could become Norway’s new petroleum province.

Barents Sea

The discovery was the first major find in Europe that Total has claimed as part of a strategy to become bolder in exploration. The other discoveries were in Azerbaijan, Bolivia and French Guiana, according to company documents.

Norway and Russia signed a maritime delimitation treaty in 2010, settling a four-decade dispute. Previously, “Norway was drilled much less than the U.K., and certain zones in the Barents weren’t open,” de Vivies said.

“We have taken risks by going quite far from the coasts, the most northern and easterly so far, nearest the Russian border,” de Vivies said. “Finding big cats is still possible in Norway.”

“Big cats” are finds of more than 200 million barrels of oil equivalent, while “elephants” are discoveries of more than 500 million barrels.

Total was granted participation in eight North Sea permits in Norway’s most recent licensing round. The company has bid for permits in the Barents Sea in the next competition.

“Potential remains in Norway,” de Vivies said. “The Barents could be an important zone for us.”

--Editors: Alex Devine, Amanda Jordan

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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