Northern Petroleum Expands from Russia to Major European Markets, Bolsters Portfolio in UK, Italy, Netherlands

Exploration innovation

Northern Petroleum began life by focusing on developing oil and gas fields in Russia before refocusing on Europe with licences held in the UK, Ireland, Italy, and Spain before growing a significant portfolio in the UK, Italy and since 2004 in the Netherlands.

The company values the quality of its exploration team in highlighting the best areas to explore and develop, while at the same time conducting extensive research in conjunction with governing bodies and local residents to ensure that every voice is heard before activities take place.

Recently, Northern Petroleum announced it had received licences containing undeveloped oil discoveries offshore Italy, adding to oil and gas field developments already being progressed in the Netherlands. The expansion of the company over recent years has encouraged significant investment in technology with assistance from sub-contractors to achieve a single vision, with £20 million raised last year alongside a loan facility of 40 million euros. Northern Petroleum’s technical team is respected throughout the oil and gas industry for its capabilities, which has aided the development of agreements with major players such as NAM (Shell/Exxon) and Repsol within the sector.

Exploration and technical director, Graham Heard, explains the company’s unique status: “What differentiates Northern Petroleum from other companies of an equivalent size is the number of field developments it has underway. We also operate a large gas field, Waalwijk in the Netherlands, which has significant future gas storage potential. In addition the company operates a very extensive portfolio of exploration opportunities plus a number of discoveries for which plans are place for appraisal and development.

“Northern Petroleum’s current activities focus on The Netherlands and Italy as core areas now surpassing the earlier concentration in the UK onshore,” he says. “Beyond the current programmes the aim of the company is to expand beyond these horizons and get involved in one or two other countries within the European arena, rather than wider global areas. Those new ventures are likely to be conducted in conjunction with Dyas B.V. the company’s Strategic Alliance partner.”

Graham outlines the scope of the company’s European operations: “Northern Petroleum believes it has an exceptional technical team, which is a very important factor in this field. The company has an integrated team of geologists, geophysicists and engineers in London, an operations group located at offices in The Hague and a team concerned with the Waalwijk gas field which Northern Petroleum aims to turn into a very significant gas storage project, which would be located in a strong geographical area near the Zeebrugge gas pipeline, right in the corridor between the UK and the continent.”

There are key differences between the Dutch and British assets, as Graham explains: “The company has larger discoveries in the Netherlands and Italy in comparison to those onshore in the UK, but the UK still has good opportunities for us. A planning application has been submitted for a well to be located to the east of the Horndean field in the UK, and Northern Petroleum is looking for sites for one other appraisal of a discovery, and one other exploration well in the Weald Basin. Progressing to onshore drilling and possible development activities requires planning permission, which takes time and is mostly outside of the company’s control.”

In regards to the Netherlands assets, Northern Petroleum has, in addition to gas production from Waalwijk and the offshore P12 permit, a diverse portfolio of six fields for development, two of which are primarily oil fields with gas caps, with the others being gas fields. There have been some delays with transferring licences from NAM to Northern Petroleum, delaying progress, but all the licences are now awarded and the company can concentrate on putting all six fields into production.

Graham elaborates: “The field developments in the Netherlands will be important for our future – one of the aspects of bringing the fields on stream is that these projects are generally gas to power projects. There are limits as to how much gas can be used for generation at each site so the fields will have a predicted 15 to 20 years of life in them producing stable production revenues to underwrite future growth activities. Under an agreement Northern Petroleum has with NAM, the company will look with them at further opportunities in their undeveloped oil and gas discoveries towards the end of this year.”

Of equal importance, Northern Petroleum is focusing on its Italian developments. Graham comments: “The company has new development potential in the Adriatic with three oil discoveries and we are very pleased with these awards leading towards appraisal and development activities now underway. Northern Petroleum has been awarded two licenses already from five applications, the FR.39.NP andFR.40.NP, which encapsulate the Giove, Rovesti, and Medusa discoveries.

“The company recently announced that it had received an independent petroleum engineering report that Giove contains just under 20 million barrels of probable oil reserves,” Graham explains. “Northern Petroleum has a net beneficial interest of 13.5 million barrels to add to the 50 million barrels of proven and probable reserves in the Netherlands and UK. The projected production will be significantly larger, dealing with scenarios of over 23,000 barrels, rather than 1000 to 3000 barrels expected in the onshore sector. The Rovesti discovery is expected to be reported to be of a similar size again.”

Graham elaborates some of the challenges inherent in the oil and gas sector: “The industry is very buoyant at the moment, and there are numerous opportunities for growth. Rightly the expansion of this industry will always need to satisfy environmental needs, especially dealing with areas onshore. In the EU, we anticipate that there will always be increasing environmental challenges and stringent standards. We hold a desire to meet or exceed these as we are part of the same community and will aspire to do more than maintaining existing levels. Amongst the factors Northern Petroleum strives to take onboard are the concerns of local populations when planning our activities – we intend to be good neighbours.

“Northern Petroleum expects its exploration wells to deliver significant additional value and reserves over the next five years. The portfolio the company operates should in itself make Northern Petroleum a half billion to a billion pound company within a five to ten year period given our fields, discoveries and exploration prospects,” Graham states.

“The opportunities are there for the company to develop, and the focus must now be to deliver a good cash flow from the fields in time to help fund further exploration. Northern Petroleum has wells planned, always subject to planning consents, for Italy, The Netherlands and the UK. The company is entering an exciting period of growth as we realise our production objectives with plenty of exploration and new venture activity,” he concludes.

Northern Petroleum

Industry: Oil and gas field exploration and development