Western Europe: Netherlands

WESTERN EUROPE

North Sea portions written by Arthur Andersen-Petroleum Services Group, London

Netherlands

Licensing. In 2000, the most significant licensing issue was the proposal by the Dutch Minister of Economic Affairs to introduce a series of measures aimed at improving activities on the Continental Shelf, so that companies would invest in Dutch oil / gas exploration and production.

The intended measures are four-fold:

1. Introduction of a zero-percent tariff for royalties as of 2001. Reducing the tariff to zero will have the effect of reducing the cost at any oil price, and can be seen as important for development of marginal fields, also catering for earlier and longer field production.
2. From January 1, 2001, state profit share will be levied from all license holders on the basis of the Royal Decree 1967, and the regime of later Royal Decrees will be canceled. For all license holders, a 10% uplift will be introduced.
3. State participation in exploration licenses analogous to the participation of EBN since 1994 in exploration and production licenses. At the sole request of license holders, the possibility will be opened that the state participates financially in exploration licenses.
4. Abolishment of the bonus levied for exploration licenses and spontaneous production licenses, thus reducing the threshold of application. This measure became effective on July 1, 2000.

Southern North Sea Map Click for enlarged view

In 2000, Clyde, on behalf of its consortium partners, accepted a production license over Block Q/4, also applying for a license for G/17c and G/17d. Consortium partners NAM and DSM applied for licenses over A/12b, B/10a, B/13a and L/6d, as well as spontaneous licenses over A/18d, B/10b and B/13b. TransCanada accepted licenses for K/9a, b, c, K/12, L/10, L/11a and L/14a.

The first half of 2001 saw several production licenses granted. Wintershall gained approval for a production license on part-blocks Q/05c, d and e for a period of 20 years. Gaz de France acquired a license for part-blocks G17c and d for a period of 25 years. Elf was awarded part-block K/03c for a period of 20 years while, in adjacent part-block K/03b, TotalFinaElf applied for a spontaneous production license in the south east corner. Clyde Petroleum, a wholly owned subsidiary of Gulf Canada Resources Ltd., has also accepted a license on M/07 for a period of 20 years.

Drilling. Between July 2000 and June 2001, a total of 12 new Dutch exploration and appraisal wells were started; 83% of the wells spudded were classed as exploration holes. Three quarters of the spuds were located in the more mature K, L and P Quadrants. The remaining three wells were drilled in E, F and M quadrants. Gaz de France, NAM and Wintershall each spudded three new wells.

Exploration. During the year, three new discoveries were made in the Netherlands. In 2000, Clyde drilled an exploration well in the northeastern part of Block P/9 in the lateral license, including formations of Triassic age and older; P/9-9 encountered gas and tested from a 33-ft interval at a rate of 11 MMcfd. During the first half of 2001, Wintershall is thought to have made two discoveries. Well F/16-3 found gas in a Carboniferous structure which extends into E/18. Well L/8-15 was drilled from the L8-G platform, and is testing gas.

Development / production. Two Dutch fields were given the go-ahead for development during 2000. Gaz de France’s G17d field (formerly TCPL) is expected to be developed through a minimum facilities platform with gas exported via an 80-km pipeline tied into the NGT pipeline. First production is expected by 2002 at around 42 MMcfd. Gulf Canada’s exploration successes in 2000 have been followed by development approval of the P6d field – the field is expected to be tied into the P6 main field. The P2-SE unmanned minimum facilities platform is expected to be moved into place onto P6d field in the summer of 2001, with first production expected later in the year. Production is expected to plateau at around 60 MMcfd.

No new fields started production in the Netherlands offshore area in 2000. Dutch offshore liquids production decreased by over 12% in 2000, at around 28,730 bpd, from the 1999 average of 32,700 bpd. Offshore gas production was down on 1999 production, averaging 2.65 Bcfd.