Skinfaks/Rimfaks IOR – Strong Horses in The Gullfaks Family Classification: Statoil internal Status: Draft Skinfaks/Rimfaks IOR – Strong Horses in The Gullfaks Family Sandsli, 8.februar 2005

Skinfaks/Rimfaks IOR (SRI) – strong horses in the Gullfaks family Topics to be covered: Seismic amplitudes in exploration Existing technology to reduce cost and increase reserves Production technology issues Examples of flexibility built into the concept Lessons learned Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

Situation in year 2001: The SRI team also matured the Gulltopp (Dolly) discovery to PDO level in 2003 Rimfaks Brent: Production start year 2000. Spring 2001: IOR possibility documented, 2 infill wells + extra gas handling capacity gives 2.1 MSm3 of extra oil. GF Sør L+M templates, prod.start Sept.2001. 3 flowlines to GFC for GF Sør Brent gas production. Extra capacity and tie-in possibility at L/M for upsides in GF Sør Field. Prospects defined in the Brent Gp. and Statfjord Fm. in the Ole, Dole and Doffen (ODD) segments. (Later named Skinfaks.) Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

Proven segments: N2 and N3 Upper Brent Prospects: Exploration well in ’Dole’(N3) and ’Ole’ (N2) segments drilled in spring, 2002 Proven segments: N2 and N3 Upper Brent Prospects: N4 upper Brent. P(f): 97% N5 upper Brent. P(f): 80% N1 upper Brent. P(f): 90% Prospects: N4 lower Brent. P(f): 56% N1 lower Brent. P(f): 46% (defined in 2004) N1 Statfjord. P(f): 40 % N4 Statfjord. P(f): 90% Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

X X Rimfaks Brent IOR Skinfaks DG1, DG2 and DG3 are decision gates in Statoils project development model DG1 team establ. 33/12-8S DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. Rimfaks Brent IOR Static (G&G) model used: 3D IRAP RMS (built 2001) Dynamic (res.) model used: 3D Eclipse 300 (PDO mod.) 3D Eclipse 300 (new model, built 2002) Elements included in production strategy: - 2 infill wells. - 3 MSm3/Sd ekstra gas pr. - Gas reinjection, blowdown from oct.2010 (PDO strategy) 3. infill well, with DIACS 3 -> 4 MSm3/Sd extra gas prod.rate Volume reduction (significant!) Skinfaks Static (G&G) model used: 2D IRAP Classic + GeoX 3D IRAP RMS Dynamic (res.) model used: Field analogue + MBAL models 3D Full Field Eclipse 100 (Brent reservoir) Elements included in production strategy: - Water Injection X - 5 conventional, horisontal wells. - Depletion DIACS compl. Gas lift Segm.N1 UB incl. in ’basis’ - Gas Injection X - Wells: 1 + 1 ML + 1 sidetr. - N1 UB and N4 Statfj. excl. from ’basis’ Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. 33/12-8S DG1 team establ. Feasibility study phase DG1/BoK concept: A Gullveig Statfjord well was a part of the project in the DG1 and early DG2 phases. Later excluded. Project feasible. Establish project team. Go on with concept (screening) studies. Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

4 GF-concepts evaluated: GFC DG1 team establ. Scr. ph. 1 Screen.phase 2 Scr. ph. 3 33/12-8S Feasibility study phase DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. 4 GF-concepts evaluated: GFC Gulltopp GFA ’A’ ’B’ Continue with optimising concept ’D’ for a final concept selection (AP1 – Approval point 1). ’C’ ’D’ L/M Skinfaks As we now know, concept for Gulltopp was in next screening round changed to paltform well. Rimfaks IOR Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

Wells and pipelines in a network For the SRI project: Skinfaks and Rimfaks wells prognosed with very different tubing head pressures Impact on production profiles Decision: Two flowlines instead of one, from the SRI prod.system. Wells and pipelines in a network PROJECT Discipline Leaders: Drilling, Well and Production Technology Petroleum Technology Facility (Subsea) Reservoir simulation Flow assurance ”Nodal analysis” Tools: OLGA GAP/PROSPER ECLIPSE W. NETWORK OPTION Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

”The SRI Technical Forum” The SRI Core Team ”The Technical Forum”: Project members from all engineering disciplines (Reservoir, ProTech, Drilling, Completion, Flow Assurance, Subsea, Pipeline,Topside) A leader was appointed Meetings were held regularly (every week) ”The SRI Technical Forum” Which tasks do the other persons have ? How are my data used ? Possibilities? Limitations? Consequences? Concept screening/selection Design Basis Document Technical solutions Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

9 variants of concept ’D’ evaluated: DG1 team establ. Scr. ph. 1 Screen.phase 2 Scr. ph. 3 Scr. Ph. 4 33/12-8S Feasibility study phase DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. 9 variants of concept ’D’ evaluated: - 1 or 2 templates, 1 or 2 flowlines, with or without smart wells. Selection criteria: NPV (and then IRR and NPV/CAPEX discounted) Robustness (drilling), and flexibility wrt. upside volumes To L/M Recommendation, AP1, end of october 2003: Concept ’3S’ (2 templates, 8 slots, 2 flowlines, smart wells (DIACS, one ML): BUT: Further work the following weeks weakens the project economy significantly: Cost increase (rock dumping, pilot well in segm.N4), delayed prod.start (Jan.06 => Oct.06). As we now know, concept for Gulltopp was in next screening round changed to paltform well. Recommendation from Project end of November.2003: Postpone DG2/BoV. Improve concept and economics. ’Basis’ well ’Upside’ well Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

11 variants of concept ’SRI to GFC via L/M’ (re)evaluated: DG1 team establ. Scr. ph. 1 Screen.phase 2 Scr. ph. 3 Scr. Ph. 4 Scr. Ph. 5 33/12-8S Feasibility study phase DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. 11 variants of concept ’SRI to GFC via L/M’ (re)evaluated: - 1 or 2 templates, + 1 or 2 satellites, 1 or 2 flowlines. - Further optimising of subsea wellhead locations and subsea/pipeline cost. - Increased volumes (3.RF well, Skinfaks N1 segment, Skinfaks gas lift) Upside volumes quantified, value (risked) calculated. Selection criteria: NPV (and then IRR and NPV/CAPEX disc.) To L/M Recommendation from Project, February 2004: Optimise concept ’2SX’ (1 template, 1 satellite, 2 flowlines) further towards DG2. As we now know, concept for Gulltopp was in next screening round changed to paltform well. ’Basis’ well ’Upside’ well Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

Discussion with partners on ’low cost’ alternatives: DG1 team establ. Scr. ph. 1 Screen.phase 2 Scr. ph. 3 Scr. Ph. 4 Scr. Ph. 5 Scr. Ph. 6 . 33/12-8S Feasibility study phase DG1 (BoK) DG2 (BoV) DG3 (BoG) PDO del. Discussion with partners on ’low cost’ alternatives: Early in the concept selection phase (spring 2003), alternatives for SRI based on re-use of existing infrastructure (I, J, K templates) were briefly reviewed from the operator and put behind for specific reasons, but without any formal process or documentation. Now, license partners want to compare concept 2SX with other alternatives, making use of existing infrastructure: 38 (!) combinations/variants were evaluated Screening criterion: NPV. In addition: Relative value (NPV/CAPEX disc.), IRR, technical maturity and risk, and flexibility for realising upside volumes. As we now know, concept for Gulltopp was in next screening round changed to paltform well. Partners approved concept 2SX (AP1/DG2), September 2004 Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

After AP1, your influence on the concept as subsurface engineers is very much reduced. Statoil’s Project Development Model, Planning Phase: In Statoil’s governing documentation (AR05 ++) the focus on AP1 seems less than on the formal approval point DG2 (provisional project sanction). At AP1, concept selection point: Important with a good picture of the resource potential in the area. Formal requirements for uncertainty analysis on volumes and production profiles. As we now know, concept for Gulltopp was in next screening round changed to paltform well. Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

This development benefits from flexibility in existing infrastructure Classification: Statoil internal Status: Draft PDO delivered Dec.2004 PDO approved Feb.2005 This development benefits from flexibility in existing infrastructure Majority of subsea production system is based on proven building blocks. Full flexibility for producing wellstream through any flowline back to GFC. Extra hubs for tie-in of future flowlines on tie-in manifold, template N and satellite N5. Increased flowline diameter from 6” to 8” between template N and satellite N5. Multiphase meters on each well. Included separate meter on gas lift header. Majority of valves are actuated and controlled from GFC. Providing additional connection points for potential future developments at a low pre-investment cost

Reserves and CAPEX (cut-off year 2020) (CCE-2 is last project update, per September 2005) Reserves and CAPEX PDO 2020 CCE-2 Upd 2020 Oil (MSm3) 5,71 6,21 Rich gas (GSm3) 2,58 2,57 CAPEX (MNOK05) 3432 3588 Results, CCE2 (upd. cost, plan and volumes) Unit Cut-off year 2020 b.tax a.tax NPV 7% MNOK 05 5 572 1 349 Break even price, oil USD/bbl 9,0 10,3 IRR % 73 33 NPV in MNOK05 has increased with a factor of 3-4 since the PDO - 1/3 of effect due to increase in oil production volumes - 2/3 of effect due to increased prices on oil and gas Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.

Skinfaks/Rimfaks IOR – strong horses in the Gullfaks family Lessons learned: Combining infill drilling (IOR) and new disoveries can make a profitable project. Involve the license group EARLY in the concept selection phase. Document also ‘obvious’ choices wrt. concepts screended out. The focus on the concept selection point (AP1) should be stronger in Statoil’s governing documentation, wrt. line and partner involvement. Create a technical forum for continuous, cross-disciplinary discussions ‘on working level’ (not only at core team level). Define and place the ‘system responsibility’ role early. Make sure that various models (wells - pipeline network) are consistent. Strive to get flexibility included in the concept. It will most certainly pay off! Skinfaks/Rimfaks IOR. RES/PRO-seminar, 23.-24.November 2005.