North Sea Unit:

Many creative ideas for the work programmes of 6th concession round

6th concession round last year brought new operators into the Danish sector, and they may add novel ideas to exploration. Several of the new operators possess experienced personnel from major companies now getting the opportunity for trying out their own ideas. That is why Director Peter Helmer Steen from the newly established governmental North Sea Unit is looking forward to the result of the round.

6th round resulted in 14 licences for exploration comprising a total of 3,490 km² corresponding to a quarter of the area offered. A novelty is that the govern-ment-owned North Sea Unit is a 20% partner in all licences. DONG previously representing this carried interest has been partly privatized and will now have to compete on equal terms with other commercial companies. It got, however, four licenses of which two were as an operator. Half of the 14 licences have got new operators previous not having had such functions in the Danish sector.

Experienced personnel in new boiler suits
Helmer Steen sees the opportunities in the new exploration programmes to be performed:

“New players have entered the Danish sector. It looks as if quite a few experienced exploitation specialists from major companies have started working for small, newly established companies like Arkay, Geysir and Scotsdale. They may take a fresh look at the sector. There are many creative ideas in their work programmes, and the operators are optimistic and eager to get going.

Director Peter Helmer
Steen from the newly
established governmental
North Sea Unit is looking
forward to the result of the round

Actually, we have achieved an interesting combination of operators in the 6. round. In addition to minor and new companies we have major and well established companies like ConocoPhillips, Hess, Maersk Oil and DONG Energy presenting most interesting programmes. Furthermore,  the large company, Wintershall, based on experience from Holland and Germany, has ventured into the Danish sector with comprehensive programmes.”

The exploration programmes typically start up by an analysis of the seismic data supplemented by gathering new data as a basis for drilling an exploration well. Some of the major companies like ConocoPhillips, Maersk Oil and Wintershall have their own rigs but the present lack of rigs has forced others to postpone their drilling activities and pressed up the rates for rigs. Based on this fact the North Sea Unit is expecting to have to allocate some 500 million DKK instead of the planned 300 million DKK on the agreed exploration programmes.

Creating synergy
Till now the North Sea Unit is only a small company of 6 employees, but it is free to draw on the expertise of the DEA and the GEUS as well as hiring consultants.

“In that way we can offer a constructive contribution to the new licenses. We shall use our special status to establish contacts between operators and the Danish knowledge centres, and we want – respecting the confidentiality required in such a consortium – to -create synergy between the various consortia in order to make as much use as possible of the Danish know-how.

In several cases an agreement has been made with neighbouring consortia to carry out joint and coordinated exploration programmes. Thus Wintershall has initiated a most comprehensive seismic programme planned for the neighbouring licenses to participate, too. Such an effort will create a most useful synergy.”

The North Sea Unit is not allowed to act as operator and should not compete with commercial oil companies for new licences, but its 20% share can be increased to 40% if a partner in a consortium should want to sell all or part of his shares.

Production of oil and gas
At the latest in 2012 when the North Sea Unit is to be responsible for the government-owned share of 20% of the Danish Underground Consortium, income will be generated from sale of the Unit’s share of the production of oil and gas.

“We shall gradually develop our competences in order to step in as a fully qualified partner in a producing consortium. Hopefully we can kick-start a bit if new licences result in discoveries which can be produced in a hurry.”