Analysis: Norway Oil Production Falls, Gas Production Rises

Norway oil production has declined over the past 10 years from 3.1 million b/d in 1999 to 2.3 million b/d in 2009, according to the BP Statistical Review of World Energy 2010. This decline can be attributed to the maturation of existing large oil fields offshore Norway. Norway's proved oil reserves also have declined from 10.9 billion barrels in 1999 to 7.5 billion in 2008. The Norwegian Petroleum Directorate (NPD) said that Norway has been unable to offset the production decline from existing fields with resources produced from new discoveries, and that "determined efforts are needed now to stem annual declines in production," said Norway Minister of Petroleum and Energy Terje Riis-Johansen. These efforts include more exploratory and development well drilling and enhanced oil recovery. NPD estimates that oil production for 2010 will be somewhat lower than in 2008 at 108.7 million Sm3 or 1.87 Mb/d. From 2010 through 2014, oil production is expected total 491 million Sm3, or 160 million Sm3 less than the preceding five-year period. However, Norwegian natural gas production has flourished in the past 10 years, thanks to field such as Ormen Lange and Snohvit, which has increased Norwegian gas exports. Norwegian gas production has grown from 48.5 billion cubic meters in 1999 to 103.5 billion cubic meters last year, according to the BP Statistical Review of World Energy 2010. Norway's proved natural gas reserves also grew from 1.25 Tcm in 1999 to 2.22 Tcm in 2008. Natural gas production has risen as oil and gas companies moved northward into underexplored areas as additional exploration acreage has been gradually opened; these underexplored areas contain large gas reserves. As a result, a number of gas fields have been developed and a comprehensive gas transport infrastructure has been established, making it possible to develop additional gas resources. Gas production is expected to grow from an estimated 105 billion Sm3 this year to 112.2 billion Sm3 in 2014. NPD estimates that only 40 percent, or 5.3 billion standard cubic meters of oil equivalent (scm o.e.), of petroleum resources on the Norwegian shelf has been produced. Total remaining recoverable resources is estimated at 8.1 billion scm o.e., including 4.8 billion scm o.e. of proven resources and undiscovered resources of 3.3 billion scm o.e. NPD estimates that 35 percent of undiscovered resources lies in the North Sea, 35 percent in the Norwegian Sea and 30 percent in the Barents Sea. NPD has set a goal of reserves growth on the Norwegian Continental Shelf of 800 million scm of oil before 2015. To meet this goal, NPD said Norway must increase recovery from producing fields, develop discoveries in the vicinity of existing infrastructure, drill more development wells and operate fields in a more cost-efficient manner. Field maintenance also has impacted Norway's oil and gas production in recent months. NPD reported that average daily production in June 2010 was about 1.87 million barrels of oil, natural gas liquids and condensate, 324,000 b/d less than in May 2010. Gas production was about 8.5 billion Sm3, or .5 billion Sm3 less than in the previous month. NPD attributed the lower production to closures of the fields in the Ekofisk area for planned maintenance, while the Vale field was closed due to technical problems. Heidrun also was closed June 1 through June 26 due to maintenance, while Gullfaks C was closed due to well problems

Background of natural gas

Natural Gas is a vital component of the world's supply of energy. It is one of the cleanest, safest, and most useful of all energy sources. Despite its importance, however, there are many misconceptions about natural gas. For instance, the word 'gas' itself has a variety of different uses, and meanings. When we fuel our car, we put 'gas' in it. However, the gasoline that goes into your vehicle, while a fossil fuel itself, is very different from natural gas. The 'gas' in the common barbecue is actually propane, which, while closely associated and commonly found in natural gas, is not really natural gas itself. While commonly grouped in with other fossil fuels and sources of energy, there are many characteristics of natural gas that make it unique. Below is a bit of background information about natural gas, what exactly it is, how it is formed, and how it is found in nature.

What is Natural Gas?

Natural gas, in itself, might be considered a very uninteresting gas - it is colorless, shapeless, and odorless in its pure form. Quite uninteresting - except that natural gas is combustible, and when burned it gives off a great deal of energy. Unlike other fossil fuels, however, natural gas is clean burning and emits lower levels of potentially harmful byproducts into the air. We require energy constantly, to heat our homes, cook our food, and generate our electricity. It is this need for energy that has elevated natural gas to such a level of importance in our society, and in our lives.
Natural gas is a combustible mixture of hydrocarbon gases. While natural gas is formed primarily of methane, it can also include ethane, propane, butane and pentane. The composition of natural gas can vary widely, but below is a chart outlining the typical makeup of natural gas before it is refined.



Typical Composition of Natural Gas

Methane CH4 70-90%

Ethane C2H6 0-20%

Propane C3H8

Butane C4H10

Carbon Dioxide CO2 0-8%

Oxygen O2 0-0.2%

Nitrogen N2 0-5%

Hydrogen sulphide H2S 0-5%

Rare gases A, He, Ne, Xe trace


In its purest form, such as the natural gas that is delivered to your home, it is almost pure methane. Methane is a molecule made up of one carbon atom and four hydrogen atoms, and is referred to as CH4.


Ethane, propane, and the other hydrocarbons commonly associated with natural gas have slightly different chemical formulas, which can be seen here. For a closer look into the combustion of methane, click here.




A Methane molecule, CH4

Source: USGS

Natural gas is considered 'dry' when it is almost pure methane, having had most of the other commonly associated hydrocarbons removed. When other hydrocarbons are present, the natural gas is 'wet'.


Natural gas has many uses, residentially, commercially, and industrially. For more information on the multiple uses of natural gas, click here. Found in reservoirs underneath the earth, natural gas is commonly associated with oil deposits. Production companies search for evidence of these reservoirs by using sophisticated technology that helps to find the location of the natural gas, and drill wells in the earth where it is likely to be found. To learn more about the new technologies and their environmental impact, click here. Once brought from underground, the natural gas is refined to remove impurities like water, other gases, sand, and other compounds. Some hydrocarbons are removed and sold separately, including propane and butane. Other impurities are also removed, like hydrogen sulfide (the refining of which can produce sulfur, which is then also sold separately). After refining, the clean natural gas is transmitted through a network of pipelines, thousands of miles of which exist in the United States alone. From these pipelines, natural gas is delivered to its point of use. For more information on how natural gas gets from underneath the ground to its final destination, click here.


Natural gas can be measured in a number of different ways. As a gas, it can be measured by the volume it takes up at normal temperatures and pressures, commonly expressed in cubic feet. Production and distribution companies commonly measure natural gas in thousands of cubic feet (Mcf), millions of cubic feet (MMcf), or trillions of cubic feet (Tcf). While measuring by volume is useful, natural gas can also be measured as a source of energy. Like other forms of energy, natural gas is commonly measured and expressed in British thermal units (Btu). One Btu is the amount of natural gas that will produce enough energy to heat one pound of water by one degree at normal pressure. To give an idea, one cubic foot of natural gas contains about 1,027 Btus. When natural gas is delivered to a residence, it is measured by the gas utility in 'therms' for billing purposes. A therm is equivalent to 100,000 Btu's, or just over 97 cubic feet, of natural gas.

The Formation of Natural Gas

Natural gas is a fossil fuel. Like oil and coal, this means that it is, essentially, the remains of plants and animals and microorganisms that lived millions and millions of years ago. But how do these once living organisms become an inanimate mixture of gases?

There are many different theories as to the origins of fossil fuels. The most widely accepted theory says that fossil fuels are formed when organic matter (such as the remains of a plant or animal) is compressed under the earth, at very high pressure for a very long time. This is referred to as thermogenic methane. Similar to the formation of oil, thermogenic methane is formed from organic particles that are covered in mud and other sediment. Over time, more and more sediment and mud and other debris are piled on top of the organic matter. This sediment and debris puts a great deal of pressure on the organic matter, which compresses it. This compression, combined with high temperatures found deep underneath the earth, break down the carbon bonds in the organic matter. As one gets deeper and deeper under the earths crust, the temperature gets higher and higher. At low temperatures (shallower deposits), more oil is produced relative to natural gas. At higher temperatures, however, more natural gas is created, as opposed to oil. That is why natural gas is usually associated with oil in deposits that are 1 to 2 miles below the earth's crust. Deeper deposits, very far underground, usually contain primarily natural gas, and in many cases, pure methane.

Natural gas can also be formed through the transformation of organic matter by tiny microorganisms. This type of methane is referred to as biogenic methane. Methanogens, tiny methane producing microorganisms, chemically break down organic matter to produce methane. These microorganisms are commonly found in areas near the surface of the earth that are void of oxygen. These microorganisms also live in the intestines of most animals, including humans. Formation of methane in this manner usually takes place close to the surface of the earth, and the methane produced is usually lost into the atmosphere. In certain circumstances, however, this methane can be trapped underground, recoverable as natural gas. An example of biogenic methane is landfill gas. Waste-containing landfills produce a relatively large amount of natural gas, from the decomposition of the waste materials that they contain. New technologies are allowing this gas to be harvested and used to add to the supply of natural gas.

A third way in which methane (and natural gas) may be formed is through abiogenic processes. Extremely deep under the earth's crust, there exist hydrogen-rich gases and carbon molecules. As these gases gradually rise towards the surface of the earth, they may interact with minerals that also exist underground, in the absence of oxygen. This interaction may result in a reaction, forming elements and compounds that are found in the atmosphere (including nitrogen, oxygen, carbon dioxide, argon, and water). If these gases are under very high pressure as they move towards the surface of the earth, they are likely to form methane deposits, similar to thermogenic methane.



Natural Gas Under the Earth

Although there are several ways that methane, and thus natural gas, may be formed, it is usually found underneath the surface of the earth. As natural gas has a low density, once formed it will rise towards the surface of the earth through loose, shale type rock and other material. Most of this methane will simply rise to the surface and dissipate into the air. However, a great deal of this methane will rise up into geological formations that 'trap' the gas under the ground. These formations are made up of layers of porous, sedimentary rock (kind of like a sponge, that soaks up and contains the gas), with a denser, impermeable layer of rock on top. This impermeable rock traps the natural gas under the ground. If these formations are large enough, they can trap a great deal of natural gas underground, in what is known as a reservoir. There are a number of different types of these formations, but the most common is created when the impermeable sedimentary rock forms a 'dome' shape, like an umbrella that catches all of the natural gas that is floating to the surface. There are a number of ways that this sort of 'dome' may be formed. For instance, faults are a common location for oil and natural gas deposits to exist. A fault occurs when the normal sedimentary layers sort of 'split' vertically, so that impermeable rock shifts down to trap natural gas in the more permeable limestone or sandstone layers. Essentially, the geological formation which layers impermeable rock over more porous, oil and gas rich sediment, has the potential to form a reservoir. The picture below shows how natural gas and oil can be trapped under impermeable sedimentary rock, in what is known as an anticlinal formation. To successfully bring these fossil fuels to the surface, a hole must be drilled through the impermeable rock to release the fossil fuels under pressure. Note that in reservoirs that contain oil and gas, the gas, being the least dense, is found closest to the surface, with the oil beneath it, typically followed by a certain amount of water.

With natural gas trapped under the earth in this fashion, it can be recovered by drilling a hole through the impermeable rock. Gas in these reservoirs is typically under pressure, allowing it to escape from the reservoir on its own.

Source

NaturalGas.org