Intends to invest 20 billion on the Norwegian shelf in the next four yearsThe new Managing Director of Wintershall Norge has no plans to rein in the company’s ambitions in Norway.
Published 22 November 2017 07:09
Several international oil companies have recently sold all or some of their interests on the Norwegian shelf. However, the German company Wintershall has no such plans.
“We are ready for this. Wintershall will continue on its course in Norway, which is to invest in projects and be an important player on the Norwegian shelf. We have no plans to downsize in any way”, said Hugo Dijkgraaf.
The Dutchman has now finished his first week as the head of Wintershall’s operations in Norway. And with a mandate from its parent company, the German chemical giant BASF, the oil company intends to invest NOK 20 billion in Norway over the next four years.
“We have their full support to maintain a high level of activity. A strong and solid owner means that we can continue investing and think in a long-term perspective. Now it will be my job to ensure that we live up to the confidence they have placed in us”, said Dijkgraaf.
Much of the money will be invested in projects which are now under development, such as Maria, Skarfjell and Aasta Hansteen, as well as further development of the Brage field, of which Wintershall succeeded Statoil as the operator in 2014.
Most exploration will be in Norway
The company is also spending big money on exploration. Next year it will drill between five and seven exploration wells on the Norwegian shelf, which means that more than 50 per cent of the global exploration budget for 2018 is being spent here in Norway.
“The figures speak for themselves. We are confident about exploration in Norway in the next few years, and we know that we need to find new resources in order to continue developing the Norwegian shelf”.
This confidence in the future also applies to the Barents Sea, which is one of the hot topics in the Norwegian oil industry. This year, Statoil led the charge in the biggest exploration campaign of recent times in our northernmost marine areas, but the results were disappointing.
“It is too early to write off the Barents Sea. We have not done any drilling there this year ourselves, but we will be doing so in the future, perhaps as early as next year”, said Dijkgraaf.
Wintershall currently has a stake in three licences in the Barents Sea, but wants to expand its portfolio.
NOK 3.7 billion cheaper
Last week it was announced that the Maria field could come onstream as early as December this year, around one year earlier than originally estimated in the development plan. Not only that, but the estimated investment was reduced from NOK 15.7 to 12 billion.
“Experience from this development will also be useful in other parts of the company, both in Norway and other parts of the world. It is particularly applicable to the Skarfjell development, which has a very similar profile.”
Both Maria and Skarfjell are being developed as subsea installations which are tied back to existing platforms. The aim is to submit the development plan for Skarfjell in the first six months of 2018.
The Maria project, which is Wintershall’s first as a developer in Norway, has been headed by Dijkgraaf for the last five years. He points out that around 90 per cent of the suppliers on the project are companies registered in Norway.
“Good partnerships with our suppliers have been a major factor in making the Maria development so successful. It was not our sole aim to use Norwegian suppliers, but they proved to be the best alternative. In my view, the Norwegian oil industry has shown itself to be extremely competitive”.
In the last few years, Norwegian and international oil businesses have been badly affected by a crisis triggered by the falling oil price and high costs. The downturn has led to cost cuts, which have improved the ability of Norwegian companies to compete abroad.
“The downturn has affected many people very badly, but for the industry as a whole, it has been healthy and necessary. We are now better equipped to perform well in the years ahead”, believes Dijkgraaf.