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Statoil confirms connection between Aldous and Avaldsnes oil fields; possibly one of 10 largest oil finds ever on the Norwegian Continental Shelf

Statoil
Statoil says the Aldous and Avaldsnes combined potential may represent the largest NCS discovery since the mid 1980s. Click to enlarge.

Statoil has confirmed communication between the Aldous and Avaldsnes oil discoveries in the North Sea. (Earlier post.) In combination these discoveries may represent an oil structure of between 500 million and 1.2 billion barrels of recoverable oil equivalent.

If the upper part of the interval strikes pay dirt, the discovery will be one of the ten largest oil finds ever on the Norwegian Continental Shelf (NCS). Statoil has a 40% stake both in licence PL 265, where Aldous was discovered, and in PL 501, where the Avaldsnes discovery was made. The discovery area is about 140 km west of Stavanger, Norway, in a water depth of 112 meters. Reservoir depth is about 1,900 meters.

Aldous/Avaldsnes is a giant oil discovery, and according to our estimates the combined discovery may make the top 10 list of NCS oil discoveries. Norway has not seen a similar oil discovery since the mid-eighties.

—Tim Dodson, Statoil’s executive vice president for Exploration

This is the third “high-impact discovery” (a total of more than 250 million barrels of oil equivalent, or 100 million net barrels of oil equivalent to Statoil) for Statoil as an operator in 2011. In April of this year the 250 million barrel Skrugard oil discovery was made in the Barents Sea, and the 150-300 million barrel Peregrino South oil field was discovered offshore Brazil.

Statoil2
Aldous/Avaldsnes. Click to enlarge.

As the company announced earlier on 8 August, a minimum 65-meter oil column has been confirmed in Aldous Major South well 16/2-8 in the North Sea. The discovery was made in Jurassic sandstone in a very good quality reservoir consisting of coarse-grained, unconsolidated sand. The well has also established common oil/water contact between the Aldous and Avaldsnes structures, and according to preliminary estimates the combined discovery in the two licenses (PL 265 and PL 501) totals between 500 million and 1.2 billion barrels of recoverable oil equivalent.

Between 200 and 400 million barrels of these resources have been discovered in well 16/2-8, with strong indications from well data of another 200 to 400 million barrels of recoverable oil equivalent in the same structure, whereas a resource base of 100 to 400 barrels previously has been estimated in the Avaldsnes structure (PL 501).

The well was drilled by the Transocean Leader drilling rig, which soon will spud Aldous Major North well 16/2-9 (PL265) to clarify the further potential and any communication with Aldous/Avaldsnes. In addition the partners plan further appraisal drilling in licence PL 265 next year to clarify the full volume potential for a future development solution.

As we said at the Capital Market Day event in New York in June, the NCS is a world-class petroleum province. The Aldous/Avaldsnes discoveries are evidence that the NCS is still attractive. Making a discovery of this size in a mature area shows that exploration is all about perseverance, creativity and obtaining new knowledge.

—Tim Dodson

Aldous Major South is located in licence 265. Statoil is the operator and has a 40% interest. The other partners are Petoro (30%), Det norske oljeselskap (20%) and Lundin (10%). Avaldsnes is located in licence 501. Lundin is the operator and has a 40% interest, whereas partners Statoil and Mærsk have 40% and 20% interests, respectively.

Comments

Engineer-Poet

By exaggerating the crude-oil price swing on the down side, overconsumption would indeed be promoted... elsewhere. It wouldn't surprise me if some nations used their SPRs to make money off this via arbitrage; the "stabilization" fees paid by US consumers would go into e.g. Chinese pockets during the upswings.

Just about the last thing we need to do is encourage oil consumption, at any time, for any reason.

Roger Pham

@E-P,
What make you think that the Chinese, Indian, Western European and Japanese, Korean, etc. won't do the same, setting up a PAF for such, since they are big net importers of petroleum. If the USA shows good leadership, the world will usally follow. Plenty examples of US's leads in technology and sociology were: democracy, transistor, IC, PC, Internet, Windows and Mac OS's, social networking, etc.

Any countries whose economies can be severely dirupted by the swing in petrol prices would benefit from price stabilization mechanism. That would include any country except for OPEC.

Engineer-Poet

OPEC has the ultimate SPR. All OPEC would have to do is restrict production a bit to suck all the PAFs dry.

Any scheme which involves petroleum subsidies has the same fatal flaw.

Roger Pham

@E-P,
Many OPEC countries are friends of the USA and the West. They depends on trade and technology support from the West. Most OPEC countries are just as dependent on the steady income from petrol sale as we are dependent on the supply of petrol. The cost of living of their population is heavily subsidized by the petrol income that any disruption can lead to social unrest.

You proposed increase in petrol tax, which will displease OPEC more than my Price Adjustment Fund idea, since under the PAF, if petrol price will rise by itself at a rate of 7% yearly, which is a very likely scenario, there will be no increase in petrol tax.

The Europeans and the Japanese have been keeping very high petrol tax for the past many decades without any reprisal from OPEC. Petrol prices in Western Europe and Japan have always been several folds higher than those in the USA.

Engineer-Poet

Why should the friendliness of a few OPEC nations matter for US policy? Most subsidize domestic consumption, leaving a decreasing fraction available for export; regardless of how friendly they are, dependence on them is bad for us.

How has our pursuit of OPEC-friendly policies under Bush benefitted us? Why should we care if OPEC would be displeased if we pursued similar policies to the rest of the OECD? Your own examples of Europe and Japan prove that there's nothing they can do without damaging themselves. There is no downside, at least not for us.

Roger Pham

Remember the Arab Oil embargo of 1973? Remember 911? Remember the War on Terror costing us trillions of $$$? By cultivating a good relationship with OPEC, we can avoid needless oil disruption and economic disruption for everyone until we can gradually build up sufficient infrastructure to substitute for oil.

As a win-win situation, those desert oil-exporting countries need not dread the end of oil. Their desert lands provide ample of areas to collect solar energy to make H2. Soon (within a decade), solar energy will be as cheap as fossil fuel energy. Cryogenic LNG tankers transporting captured CO2 from the West will drop off CO2 to be incorporated into H2 to make synthetic methane. This synthetic CH4 will then be loaded into LNG tankers to be transported back to the West, or to the East to Japan, Korea, or even China. This business model will keep Arabic oil-rich countries with a steady energy exporting income for millenia to come. Oil companies will transform themselves into ownership, management of the production and sales of synthetic fuels. Everyone can win.

Engineer-Poet

AAMOF, I do remember the embargo of 1973 (and also the embargo of 1979 which followed the establishment of the Islamic Republic in Iran).

I remember two things from those very clearly:

  1. They had nothing to do with US motor-fuel tax policy.
  2. They only affected us so badly because we had a high dependence on imports due in large part to the historical low-tax policy.

Engineer-Poet

9/11 was enabled by oil money and the consequent influence of oil states on our immigration policy; Mohammed Atta and his crew should never have been able to enter the USA. Also, ObL's stated rationale for the attack was to get US troops out of Saudi Arabia. The US troops were there to protect the Saudi monarchy and its ability to keep the oil flowing. We needed the oil to keep flowing because of... low-tax motor fuel policy.

Roger Pham

Well, E-P, we now are in agreement over the whole issue, (may be except for some very minor points).

D

@All

Peak oil has happened already. Production maxed out in 2005:

http://www.economonitor.com/blog/2011/01/the-first-oil-shock/

Or if you prefer, I can refer you to gailtheactuary:

http://ourfiniteworld.com/2011/08/15/oil-limits-recession-and-bumping-against-the-growth-ceiling/

It could be said that the housing market bubble burst and stock market crashed in part because of this. Granted, both would happen at some stage, but the timing is pretty close. A closer match is the Arab Spring, whereby several countries' governments were toppled in large part due to increased food prices, directly related to the use of land for fuel crops instead of food crops, increasing the price of food, causing massive dissatisfaction in those countries that rely on food imports. The point is that we have already had the catastrophes the alarmists have warned against. It's not some future event, IT ALREADY HAPPENED. People like jayson don't LISTEN and here we are.

And where are we? We are suffering the worse economic crisis since the Great Depression almost 100 years ago. Instead of preparing for calamity, we are now stuck with it. If it weren't for the green movement of the '70s, CAFE standards, etc., we would have something as bad as the Great Depression if not worse. We are caught with our pants down, but at least not down to our ankles. Still, we are riding the oil price rollercoaster as mentioned by Roger Pham and there is no chance to get off it until we have some major breakthroughs.

As I understand it, the whole point of this site is to note those breakthroughs. If you read this site often, you will also note the sorry state we are in. There are many articles entitled "Use of blah doped blah could increase cathode/anode potential by 50%" or "Use of blah with ICE engine gives an increase of 10%" etc. But where are these batteries? Where are these new ICE engines? It's all coulda/woulda/shoulda/someday. Granted, this is not the fault of the site, it is merely doing a very good job of reporting the current state of things. Also, all of this news is a great first step and needs to happen. However, IT IS ONLY THE FIRST STEP. These things take years to develop into something you can have in your driveway. And that is assuming the governmental funds supporting this research doesn't dry up. Some people, apparently economists, think this money should dry up because the market can't support it. In their shortsighted ignorance and with apparently adequate economics training, they miss the fact that that is the whole point. It takes research to make these things happen, and that means money. It is in societies' best interest to find a new energy source, but the free market is looking for the quick buck right now, not in 20 years. This is not a problem that can be solved in a couple of years and affects absolutely everyone. To not do something about it is suicidal. Why?

http://www.twcenter.net/forums/showthread.php?t=474921

That is a link to an economist article pointing out that the USA has had no economic growth since...let's see..2005.

The only way for our standard of living to not go down is to buckle down and really fix some things. The new CAFE standard is a good first step with reasonable goals. However, it may be too little too late. Better would be harsher standards with subsidies to the car companies to meet them. My fear is that without such, we will have cars that are tiny tin cans that get 50 MPG, yet gas will be too expensive I'll almost never be able to drive it. Food prices are directly related to oil prices. If we don't do something meaningful, then Western nations could also suffer from riots related to high food prices. What I'm saying is that I don't want to go back to a feudal society. At some stage there is a tipping point. We don't know where that is, but we shouldn't be playing with that option. There is a reason you don't smoke cigarettes at the gas station.

Roger Pham

Thank you very much, D, for insightful info and warning.

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