Shell submits plan for Norway Knarr oil field closure

London — Shell is to cease production from Norway's Knarr oil field, which has been producing at over 10,000 b/d, after an in-fill development well was drilled to maximize recovery, the Anglo-Dutch oil and gas major said July 17.

Knarr produces from a floating production storage and offloading vessel in the northern part of the North Sea and came on stream in 2015. Production last year averaged 13,000 b/d of liquids, mainly crude oil, falling in the first five months of this year to 11,000 b/d, data from the Norwegian Petroleum Directorate shows.

Shell has scaled back its presence in Norway and unlike BP and Total does not hold a stake, direct or indirect, in the Johan Sverdrup field, which has been replenishing production in Europe's highest-producing country.

However, it operates the Ormen Lange gas field, with a stake of just 17.8%, and holds minority stakes in other fields, and is also a partner in the Northern Lights carbon capture and storage project.

In an email, Shell noted it is obliged by Norwegian regulations to submit a decommissioning plan to the authorities at least two years before closing down a field, which it did earlier this year. "A final end of field life timing has not been set," it said.

It added that an in-fill well had been drilled in the second quarter "as part of the strategy of maximizing value from Knarr."

The NPD in a separate statement listed the field as one of three for which cessation of production plans have been submitted this year, the others -- Heimdal and Vale -- already having production under 1,000 b/d.

Shell has announced a 20% capital expenditure cut this year and said it expects to take a post-tax impairment of between $15-$22 billion in the second quarter, while also slashing its dividend for the first time since World War II.