The year at a glance
In January, we revealed our intent to merge land-based organisations and offshore installations in an over-arching production system designed to run the business more safely and predictably. The restructuring process proceeds as planned. The latest milestone is the opening of a new operations support centre at Sandsli.
Also in January, gas flowed from the Yttergryta subsea field on Åsgard in the Norwegian Sea. The field progressed from discovery to production in just 18 months. The average lead time for offshore oil and gas field developments in Norway is 15 years.
In March, we made a discovery at the Asterix gas prospect in the Norwegian Sea, which was deemed one of the larger finds offshore Norway in recent years.
In April, we joined forces with Norwegian power utility Statkraft to develop the 315 MW Sheringham Shoal Offshore Wind Farm off the coast of Norfolk, UK. The wind farm will have 88 turbines and is planned to start production in 2011. When fully operational, its annual electricity production will be about 1.1TWh, enough to power some 220,000 UK homes.
Also in April, we announced the acquisition of a 40% stake in 50 blocks from BHP Billiton in the frontier DeSoto Canyon area of the US Gulf of Mexico. DeSoto Canyon is located east of Statoil's current production operation at Independence Hub. The area has water depths of about 1,000 metres, and is a mostly unexplored region in the eastern part of the Gulf of Mexico (GoM), offering advantageous early access to new plays.
In May, first oil was tapped on the Tahiti field in the Gulf of Mexico.
An offshore worker died on 7 May after an accidental fall on the North Sea Oseberg B platform operated by Statoil, in connection with the removal of scaffolding from the drilling area on the B platform. The victim was an employee of scaffolding contractor STS. In direct response to the accident, Statoil and contractors Aibel and STS took the initiative to introduce improvements throughout the entire scaffolding industry.
In June, production on the Lufeng 22-1 field in the South China Sea was shut down. We operated the field together with partner CNOOC from 1997. Under an agreement between CNOOC and Statoil, CNOOC has taken over full responsibility for the abandonment of phases two and three of the field. Our Shekou operations office was closed at the end of 2009, and our activities in China are currently centred around R&D cooperation and business development.
On June 1, we were devastated by the news that three colleagues from our Rio de Janeiro office were on Air France flight 447 that disappeared over the Atlantic. Geologist Marcela Pellizzon, 29, and lawyer Gustavo Peretti, 30, both Brazilian citizens, and Norwegian lawyer Kristian Berg Andersen, 37, perished in the accident. A memorial service was held in Rio in June.
In July, first oil was tapped on the Thunder Hawk field in the Gulf of Mexico.
Also in July, the Tyrihans field in the Norwegian Sea came on stream using the world's longest directly heated pipeline - some 43 kilometres long.
During the summer, some 30 vessels took part in marine operations on the Gjøa and Vega fields in the North Sea. Gjøa is our largest project under construction in the North Sea today and expected to start producing in 2010. The field's semi-sub platform is Statoil's first floating installation to source electricity from the mainland, reducing CO2 emissions by about 210,000 tonnes per year. The smaller Vega deposit will tie in to Gjøa and also start producing in 2010.
In August, we set a world record on the Ormen Lange field in the Norwegian Sea when the world's deepest remotely controlled "hot-tap" operation was completed at a sea depth of 860 metres.
In September, our Hywind pilot project - the world's first full-scale floating wind turbine - was officially inaugurated off the coast of western Norway for two years of testing. A still immature technology facing a long road to commercialisation and full-scale wind farm construction, Hywind can help floating wind turbines make a long-term contribution to meeting the world's soaring demand for energy.
Statoil CEO Helge Lund took part in a preliminary meeting at the UN headquarters in New York, in connection with preparations for the international climate summit in Copenhagen, after being appointed a member of the UN expert group for climate and energy. Statoil was the only oil company represented in the group, which consists of approximately 20 persons from different countries.
In October, we announced the nineteenth oil find on Angola's offshore Block 31. We hold a 13.3% stake in the acreage. Sonangol is concessionaire and BP operator. We are partner in nine producing Angolan fields, which contribute more than 200,000 barrels of equity production per day to our portfolio.
In November, we changed our name to Statoil and introduced our new brand identity. The Horton case - concerning Statoil's contract with Horton Investment Ltd, related to business development in Iran - was formally closed by the US authorities in November. Statoil fulfilled the conditions of agreements signed in 2006 with the US authorities to substantially strengthen our ethics and anti-corruption practices. Offshore installation of the first wellhead platform on the Statoil-operated Peregrino field in Brazil started.
In December, Statoil and Lukoil won the technical service contract from Iraq's Ministry of Oil to develop the sizeable West Qurna 2 field in the southern part of the country. West Qurna 2 is estimated to hold 12.9 billion barrels of recoverable reserves.
We signed memorandums of understanding (MoU's) with Gazprom to import LNG into the US and trade it there. The MoU's include Gazprom getting re-gasification capacity at the Cove Point, Maryland, LNG receiving terminal. Statoil will also sell natural gas to Gazprom at various US locations, while purchasing LNG from Gazprom at Cove Point.
Finally, it was announced on 18 December that Statoil and Chinese oil giant Sinopec will carry out joint geological studies on two deep-water blocks in the South China Sea. The agreement makes Statoil the first foreign company to work with Sinopec off the coast of China.
The year as a whole
Our total equity output both in and outside Norway increased to some 1,950,000 barrels of oil equivalents per day.
We carried out an extensive exploration drilling campaign on the NCS in 2009, completing 39 exploration wells, 30 wildcat wells to test new prospects and nine appraisal wells to establish the extent and size of previous discoveries. We proved 22 new discoveries, resulting in a discovery rate of more than 70%. Most of the finds are relatively small and close to producing fields in the North Sea and Norwegian Sea, making later tie-ins possible. The most important discoveries in 2009 were Asterix, Gro, Katla and Beta West; all except Gro being Statoil-operated.
Internationally, our average daily production surpassed 500,000 boe for the first time. Equity production increased by 10% from 2008, to 512 mboe/day, and production from three new fields started during the year. We had a high level of exploration activity: six of the 29 exploration wells drilled in 2009 have been announced as discoveries, with several interesting discoveries in the US Gulf of Mexico, Canada and Angola.
Looking ahead
The Leismer oil sands development project in Canada is well underway with production start up expected in autumn 2010. The Leismer Commercial Demonstration Plant is stage one of our total field development plan for several bitumen hubs upstream.
Our Peregrino project now towers over the surface of the sea in the Campos basin off Brazil. First oil is expected in early 2011 and production should reach its plateau of 100,000 barrels of oil equivalents per day within the first year.
The onshore Marcellus shale gas leases in the eastern US are in early stages of production and growing steadily. Statoil's equity production from the Marcellus shale gas play will likely grow to about 50,000 barrels of oil equivalents per day in 2012 and at least 200,000 boe per day after 2020.
