Okea cuts reserve estimate on problem fields again – announces new write-down

Okea cuts reserve estimate on problem fields again – announces new write-down

Oil company Okea reported after the close of trading on Wednesday that it sees itself having to once again lower estimates of reserves at the Yme oil field, which has caused problems for a long time.

OKIA’s share of reserves fell from an estimate of 7.6 million barrels of oil equivalent to 5.5-6.5 million, the company wrote. This is expected to lead to delisting when the third quarter report is submitted.

This is not the first time that the oil company has been forced to reduce the value of the Yme field, which is operated by the Spanish company Repsol. The field has had production issues since it was built back up and restarted in the fall of 2021, and Okia has booked several write-downs since then.

– Claim

The decline in reserves was also the direct cause of the largest, exceeding NOK 600 million in the third quarter of last year. This is the second time since the beginning that reserves have been reduced.

– Yes, it was demanding. It’s not to be taken lightly, says Sven J. Leknes, CEO of Okea.

However, he confirms that Repsol has significantly improved production efficiency in the past year, after stopping production several times in the first year of production.

The reserve reduction this time follows an analysis conducted after drilling wells in the field earlier this year. The results are still provisional, and Okea will analyze them further in cooperation with partners, and complete a new assessment of the age of the field. As happened last time, there is talk of the field producing more water than expected.

See also  A significant decline in the stock market after a mysterious collapse - E24

As for the extent of the reduction, new details will come when Okea provides a third-quarter operating update on October 19, before the quarterly report itself.

If you calculate from the middle of the new reserve estimate that Okia presented on Wednesday, we are talking about a cut of more than 20%. The reduction of just over 1 million barrels must be viewed in the context of the company’s reserves of 60 million barrels at the end of the year, including quantities considered ready for development. Furthermore, 40 million barrels will come when the company completes its share purchase in the Statfjord field later this year.

-We have more areas to stand on, so the vulnerabilities we had previously, based on a few areas, have become much smaller. But of course we want to have as good an operation as possible. We wholeheartedly stand with the operator and other partners in the mission of getting as much out of the field as possible.

Okiya owns 15% of the shares of Yme, Repsol 55, Lotos 20 and Lime Petroleum 10.

Past problem

Yme Field has caused difficulties for many more than the current owners.

It was actually found in 1987, and production began in 1996, but was closed in 2001 when it was no longer profitable to continue operations.

Then in 2007 the field was reopened. The platform was constructed in 2011, but the following year it was evacuated when cracks were discovered in the support structure. In the same year, it became clear that it would be cancelled. The platform had been empty since 2012 and was removed in 2016 after several delays.

See also  fuel, car | Price war on petrol and diesel: now urgent for motorists

OKEA, founded by, among others, oil veteran Eric Hogan and former Minister of Petroleum and Energy (later Minister of Research and Higher Education) Ola Burton Moe, was the driving force behind the new development, a plan for which Repsol submitted to OKEA’s board. Authorities in 2017. Production began in October 2021. (conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. No copying or other use of all or part of the Content may be permitted except with written permission or as permitted by law. For more terms see here.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

Leave a Reply

Your email address will not be published. Required fields are marked *