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– On Lundin Norway’s focus on the Utsira High

This quote comes from the world-renowned geologist, Wallace Pratt, who believed that oil discoveries were based on visionary theory, technical innovation and targeted exploration drilling. The pioneers in Lundin Norway knew that the North Sea oil comes from layers of Upper Jurassic shale, and that large oil volumes had formed in the Vikinggraben. They also had clear ideas about where the oil in the area had migrated.

Other companies had searched for oil in the area since 1965, without luck. From 2004-2007, Lundin Norway acquired ownership interests in licences where the previous owners had given up and relinquished the licences to the Norwegian state – clearing the way for Lundin Norway to apply for these licences.

Choosing to invest in the Utsira High area was no easy decision. The Norwegian team was convinced that this was where its exploration efforts should be directed, despite the fact that much of the industry was sceptical on the merits of the exploration model proposed at the time. Today, it’s easy to see that Lundin Petroleum’s decision processes are one of the main reasons that both the Edvard Grieg and Johan Sverdrup fields will actually be realised. “We stood our ground; we got what we wanted, thus securing several licences in the area around the Utsira High”, says Hans Christen Rønnevik, Exploration Manager in Lundin Norway.

The Edvard Grieg field
“There was hardly any competition when we applied for PL338 in 2004”, explains Rønnevik. Luno was our first exploration well, or Edvard Grieg, as the field is known as today. The first well, 16/1-8, was drilled in 2007 and proved oil. A total of five exploration and appraisal wells have been drilled on the Edvard Grieg field, and an additional well is planned in late 2013. The gross recoverable reserves in the Edvard Grieg field are estimated at 186 million barrels of oil equivalent, and production is scheduled to start in the fourth quarter of 2015.

We have also made discoveries in wells 16/1-12 (Luno South) and 16/1-14 (Apollo). These discoveries are not included in the plan for development and operation of the Edvard Grieg field.

The Johan Sverdrup field
The Edvard Grieg field is a significant and valuable oil field in its own right and it was a confirmation that Lundin Norway’s geologists were on the right track. They saw the potential in the Utsira area, and Edvard Grieg was merely the beginning. A further two exploration wells were drilled on the Haugaland High in 2009 and 2010 which found limited amounts of oil in porous reservoirs but not in the Jurassic where we had expected. There were certainly those who thought – “told you so!”, Rønnevik continuous.

Lundin Norway applied for licence PL501 on the east side of the Haugaland High in 2009. So did Statoil, the company which had previously owned this licence. Lundin Norway was awarded operatorship, and Statoil and Maersk became partners. At the same time, we saw that the structure extended into PL265 where Statoil is the operator, and subsequently purchased a 10 percent stake in this licence as well. Rønnevik explains that worries in relation to oil migration were still a major factor for other oil companies, and Avaldsnes was considered to be a high-risk prospect.

Once again, our geologists were confident in their interpretation of the area. We had collected valuable data, particularly through core samples from previous drilling operations, we had updated our models and we had new 3D seismic data. And we made a discovery! We knew that it might be big, but we did not know just how big – which led us to be cautious in our initial resource estimates.

In 2011, our drilling activity in PL501 and Statoil’s wells in the adjacent PL265 revealed that the two licences contained a gigantic contiguous oil field with excellent reservoir quality. Today, the Johan Sverdrup discovery is estimated within a very broad range of billion of barrels of oil equivalent, ranking it in the top five in terms of largest oil discoveries ever made on the Norwegian shelf. Moreover, this was, by far, the largest oil discovery made anywhere in the world in 2010.

According to the plan, the Johan Sverdrup field will come on stream in late 2018.

Luno II
In the spring of 2013, Lundin Norway made yet another discovery on the Utsira High, this time in the southern part of the area, about 15 km south of the Edvard Grieg field. The Luno II structure, which appears to extend across two separate reservoir segments, is estimated to contain gross contingent resources of between 25 and 120 million barrels of oil equivalent.