Ekofisk Value Creation over 50 Years
Photo: ConocoPhillips/Tom Haga
Photo: ConocoPhillips/Tom Haga
Norway’s first commercial oil field, Ekofisk, has created value of around 2,500 billion kroner since the discovery in 1969, but value creation is not limited to this. In the 1960’s and ‘70’s, Norway had to import know-how and technology. Ekofisk became a catalyst for the development of Norwegian oil and gas industry that today exports world class knowledge.
On 25 October 1969, during drilling operations of well 2/4-2, the drill bit encountered hydrocarbons while drilling from shale into chalk at 3,033 meters depth into the underground. Six meters into the chalk reservoir, the drilling operations on board the drilling rig Ocean Viking ceased. The drill mud was dark and covered in oil, and the operating company Phillips Petroleum (now ConocoPhillips) stopped to examine core samples.
The rest of the story is well known. The oil discovery on Ekofisk in the southern parts of the Norwegian continental shelf is the start of what we today know as a modern and high-technological society, with world-leading industrial competence that creates jobs all over Norway. ConocoPhillips awards as much as up to 95 percent of annual Greater Ekofisk Area (GEA) related contracts of about 10-12 billion kroner to Norwegian oil service industry. The ripple effects contribute to job creation and activities in many local communities.
‘About 3,000 persons are employed in the GEA. The number includes all personnel on board platforms, rigs and vessels. In addition to this, all activities in the GEA receive support from about 900 employees, who work from the company’s headquarter in Tananger. Our personnel come from all counties in Norway and in total 240 municipalities’, Trond-Erik Johansen, President Norway and North-Africa in ConocoPhillips said.
Since production start-up in 1971, the Greater Ekofisk Area has created value of about 2,500 billion NOK, in 2018-kroner value. Taxes comprise about 1,200 billion NOK. This value creation is a result of a total production of six billion barrels of oil equivalent from the Greater Ekofisk Area since start-up. 4.2 billion barrels is produced on the Ekofisk field alone, while Eldfisk has produced one billion barrel, and 0.8 barrel oil equivalent is produced from other fields in the area. This has provided a growth in oil recovery, which has risen on the Ekofisk field from initially 17 to over 50 percent today, exceeding original expectations.
‘There is more to value creation on Ekofisk than taxes, salaries, and procurement of products and services. It is also about the development and establishment of knowledge clusters, that again contribute to transfer technology and competence to other industries in Norway and the world. This is nourishment for the intellectual society with a very long value chain’, Johansen added.
Major volumes of oil and gas in the underground remain to be produced during the next decades. A new subsea development, Tor II, is progressing in the Greater Ekofisk Area. In addition, the area is being mapped to identify new opportunities, while drilling activities continue to increase the oil recovery. However, it is more important to maintain the safety of personnel aligned with the vision of ‘nobody gets hurt’.
‘Over five decades with operated activities in the North Sea, we have built a strong safety culture in the company. Safety needs first priority every day. Health, safety and environment demands continuous follow-up from all individuals – in all parts of the organization’, Trond-Erik Johansen emphasized.
The Bravo blow out in 1977 and the Kielland accident in 1980 influenced the safety culture in the company, including the HSE standard on the Norwegian shelf.
In ConocoPhillips, we care about sustainable operations. We recognize that human activity, including the burning of fossil fuels, is contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate. Over five decades of activities in the Greater Ekofisk Area (GEA), the company has increased its focus on minimizing our footprint from our activities. Therefore, we have made a number of measures.
A new power cable to Eldfisk 2/7 B will integrate all the installations in the GEA within year-end 2019, helping to reduce the emissions of greenhouse gases further. The waste heat recovery unit on Eldfisk has been upgraded, phasing out diesel generators, and the water injection system has been modified to enable more power to operations. A re-compressor has been installed on Eldfisk, where previously flared gas is now transported to production. Diesel cranes are replaced with electric cranes on Ekofisk and the onshore Tananger base. Batteries are installed on offshore supply vessels, and new technology to reduce hydrocarbons in produced water is in use. Many first-generation facilities have been removed and disposed, and about 97 percent of the materials, excluding hazardous waste, have been reused or recycled into products such as reinforcement steel rods.
‘These examples demonstrate that the company intensifies its sustainable operations. The Ekofisk II project in 1998, reduced the CO2 emissions from 2,5 to 1,2 million tons a year. Since 2000, other initiatives have contributed to reduce CO2 emissions with 160,000 tons, and we continue to focus on new improvements, Johansen highlighted.
This fall, the company has carried out several celebrations of the 50th anniversary, among others two anniversary parties for all employees with their partners in Stavanger. On 24 October, a trip to Ekofisk was organized with representatives from the Ministry of Petroleum and Energy, license partners, press, and ConocoPhillips’ Norway management including corporate representatives. The City of Stavanger hosted a reception after the offshore visit.
The celebration 50 years after on the very day of the discovery, 25 October, was hosted by the Norwegian Oil Museum in Stavanger where the digital website ‘Ekofisk Industrial Heritage’ was launched. At the same time, the museum opened the exhibition ‘The Discovery that Changed Norway’. We encourage everyone to explore the website and visit the exhibition.
Unveiling of the 50th anniversary plaque offshore at Ekofisk 24 October. From left: Norway President Trond-Erik Johansen, Chairman and CEO Ryan Lance from ConocoPhillips, and Norway’s Minister of Petroleum and Energy, Kjell-Børge Freiberg.