Noreco 'surprised' at Dong's Siri plan

Noreco 'surprised' at Dong's Siri plan
Denmark’s Dong Energy said it had found a permanent solution for repairing the damaged subsea structure of the Siri platform in the Danish North Sea but faces resistance from project partner Noreco. 

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Josh Lewis 15 June 2011 08:07 GMT 

Dong said it had decided on a repair concept that consisted of cable stays between the platform legs and a new seabed support structure to support the wellhead caisson.

However Noreco said it had not sanctioned the repair plan and described Dong’s solution as “technically immature”.

“The license agreement requires unanimity, consequently Dong would have to execute this project at its own cost and risk,” Noreco said in a statement.

“Noreco will not participate in, nor finance, such a project. Noreco will initiate the necessary measures to protect its own position, including but not limited to risks, damages, liabilities and potential consequential losses.”

Dong’s release appeared to catch the Norwegian company off guard with a Noreco spokesman telling Upstream the company was surprised at the announcement.

“We have a different solution for the Siri field which is less expensive, at the same time it will meet all requirements regarding [health, safety, quality & environment] so we are quite surprised by this release,” he said.

When asked how Noreco’s repair solution would differ from Dong’s the spokesman did not elaborate, saying details could be found in the company’s first-quarter press release.

However, the only information given in the company’s first-quarter report about repairs to the Siri platform was that a decision was expected to take place on a repair solution by the middle of this year.

In today’s release Noreco only said its repair solution could be implemented immediately and would be the “best commercial and economic solution” for the licence.

Dong said according to its plan repair work would be completed next year with total costs amounting to Dkr2 billion ($385.3 million) over this year and next, which it said would be chalked up as operational expenses.

It added that this year’s associated cost for the permanent repair would be partly offset by rising energy prices and would have no affect on its guidance for the current financial year.

Production was initially stopped from the Siri platform in 2009 following a routine inspection, which found cracks in a subsea structure connected to the oil storage tank below the platform.

Output was resumed in January last year following the implementation of temporary safeguarding measures by adding a metal frame to stabilise the structure.

Dong is operator of the Siri licence with Noreco as a 50:50 partner.