Wintershall Dea Norway drilling raises hopes for oil hub expansion

Germany's Wintershall Dea on Sept. 6 reported positive results from appraisal drilling at its Bergknapp oil discovery, saying additional volumes had been found, in a potential boost for Asgard crude output.

In a statement, Wintershall Dea said the latest well had confirmed last year's Bergknapp find at 40 million-84 million barrels of oil equivalent, with an additional gas find in the Are formation estimated at 13 million-56 million boe.

Separately, the Norwegian Petroleum Directorate said test production from three of the appraised formations had been successful and "the licensees will consider tying the discovery into existing infrastructure in the area."

Bergknapp lies in the Norwegian Sea, further north than Norway's core oil and gas fields, and some 7 kilometers from Wintershall Dea's Maria field.

A significant find could revive the fortunes of Wintershall Dea's Maria development, the company's first Norwegian oil project, which came on stream at the end of 2017 and has proved a disappointment in terms of volumes. Maria output revived last year to reach 14,000 b/d on average, according to the NPD.

Maria is tied in to the nearby Kristin platform, where crude is stabilized before being sent to Asgard for loading onto shuttle tankers. Asgard is one of Norway's largest crude streams not loaded from an onshore terminal, alongside Gullfaks. October Asgard loadings are set to be around 84,000 b/d, according to a loading schedule seen by S&P Global Platts.

Wintershall Dea chief technology officer and exploration chief Hugo Dijkgraaf said the Bergknapp partners would "work closely... to bring the project to the final investment decision and successfully drive the development of the prospect."

The company's Norway managing director, Alv Solvheim, added: "Bergknapp is an important discovery that contributes to our strong position in this area of the Norwegian Shelf. With Maria and the nearby Dvalin field we already have an established position as a major operator in the Haltenbanken area."

Wintershall Dea holds a 40% stake in the license alongside Oslo-listed DNO and Spirit Energy, a subsidiary of UK utility Centrica, each on 30%.

In July, Wintershall Dea nudged up its global production guidance for 2021 to 630,000-640,000 boe/d citing "robust" first-half production.

Tax consultation

Norway on Aug. 31 announced a consultation on potential reforms to upstream oil and gas taxation that would abolish the direct 78% rebate for exploration activity, but speed up reimbursement of all types of upstream capital expenditure, effectively making permanent a part of the tax breaks announced last year in response to the pandemic.

The changes do not change the headline tax rate of 78%, and are thought likely to provide a cashflow boost for companies, though potentially yielding more tax in the long term due to the abolition of an allowance known as "uplift."

Companies so far have mostly refrained from comment.