"We will make our mark"Interview with Wintershall CEO Martin Bachmann by Teknisk Ukeblad about the company's latest activities in Norway and the cooperation with the Russian Gazprom
Last year Wintershall spent almost half its entire exploration budget on the Norwegian shelf and has no plans to let up the pressure this year. "This year we are planning to spend more than half our exploration budget in Norway. At the same time we are following up our ambition to produce 50,000 barrels of oil a day from the northern North Sea areas by 2015," Martin Bachmann, a member of the board of Wintershall, responsible for exploration and production, tells Teknisk Ukeblad. Teknisk Ukeblad met Bachmann during the 25th anniversary celebrations for the German-Norwegian Chamber of Commerce in Oslo. Since German energy giant Wintershall acquired the small Norwegian company Revus, its ambitions have been clear. "If you look at what we have achieved in exploration and production since 2005, you will see that we have been involved in at least half the major discoveries on the Norwegian continental shelf. We intend to be one of the most significant companies in this part of the North Sea," says Bachmann. The company is involved in the Jordbær/Knarr development, the plans for which will be approved by the Norwegian Parliament in June, in the plans for the development of the Lundin-operated Luno field and in the Maria field, of which Wintershall itself is the operator. A new delineation well is planned on this last field before production commences. The size of the discovery is between 60 and 120 million barrels of recoverable oil and 2-5 billion standard cubic metres of recoverable gas. In addition, the company has other discoveries, such as Grosbeak and Beta, and is a stakeholder in Catcher and Cladhan on the UK shelf.
Lost important staff
"We see several good possibilities for achieving the production volumes on which we have set our sights. Eleven years ago we were a small company in Norway, but the acquisition of Revus transformed us. Revus was an exploration company with a good portfolio. With our experience and know-how we now intend to develop our exploration activities into production," says Bachmann. When Revus was acquired by Wintershall in 2008 a number of high-profile personnel left the company, preferring to form their own exploration companies. This does not alarm Bachmann. "Since taking over Revus we have continued to make significant discoveries. I am very satisfied with our team, who are now working with the entire value chain from exploration to production. We started with about 50 people and now have 130. We expect to grow to 200 in the next few years," says Bachmann.
Into the Barents Sea
In the recently completed 21st licensing round on the Norwegian shelf, Wintershall was awarded its first operatorship of a licence in the Barents Sea, PL 611. The company is in the early stages of exploration on this licence. "When you are talking about the Barents Sea you have to remember that this is pioneer work that is going on. There is a big difference between exploration here and exploration in, for example, the Tampen area. Our presence in the north is a confirmation of the long-term perspective we have in Norway," says Bachmann. Wintershall has also reinforced its presence in Russia. The company recently entered into an agreement with the giant Russian gas operator Gazprom to develop the deeper levels of the Urengoy field, in exchange for Gazprom gaining access to interests in the North Sea.
Expanding in Russia
"We want to expand our activities in Russia, and Gazprom wants to expand its involvement in the North Sea. We have always had a desire to grow in Russia and have had considerable success there," says Bachmann. He underlines that Wintershall has a diverse portfolio in addition to its operations in Russia. "That's precisely why we have other legs to stand on, such as Norway," he points out. "Other companies have not been as successful in Russia, as illustrated by the recent agreement between BP and Rosneft, which the Russian company cancelled. What is the key to success?"
Must have something to offer
"The key is a long-term partnership involving give and take. Our partnership with Gazprom did not start with us beginning to produce oil and gas in Russia. We began by setting up a jointly-owned company, Wingas, giving Russia access to the market to be able to sell natural gas. It took a long time before we started talking about doing something together on the production side," says Bachmann, who emphasises that if a relationship is to succeed, it cannot be one-sided. "If you go into Russia looking for a share of the resources there, you will meet scepticism and questions about what you have to offer in exchange. You have to bring something with you. In our case it was technology to carry out the continued exploitation of the Urengoy field, which is of strategic interest for the Russians," Bachmann points out. As yet, no decision has been made about which North Sea interests Gazprom will gain access to. By the end of the year the company is to decide what it wishes to be involved in.
Gazprom has previously been very interested in gaining a foothold in the European gas market and there are some who are predicting surprises when the company gets involved in the North Sea. Bachmann is not worried about Russian involvement in the region. "Any talk of Russian domination in the North Sea would be far-fetched. It will take a long time before Gazprom's involvement reaches that sort of level. I see no problems in having Gazprom as a partner in licences. They are trustworthy and very solid, in the long term too," Bachmann maintains.
TEXT: MAIKEN REE, firstname.lastname@example.org