Ekofisk The Discovery That Transformed Norway

December 20, 20191

Phillips entering Norway

2

1962Phillips Petroleum in Oslo

1964Legal framework/ borderlines Denmarkand UK

1965FirstLicense round

December 20, 20193

First License Round

• Phillipsgroup (Phillips, Norske Fina, Norsk Agip) awardedthree licenses

• License 016 - Blocks 7/8, 8/1, 16/11 and 17/12• License 017 - Blocks 8/8, 8/10 and 8/11• License 018 - Blocks 1/5, 2/4, 2/7 and 7/11

• License group extended• Phillipsgroup viewed awarded blocks to be too concentrated• Group extended with Petronord group (Elf, Total and Norsk

Hydro)

• Work committment• Seismic acquisition• Drill five 4000m long wells – at least one in each license• By September, 1971

2 3

7 8 9

1

16 17 18

Phillips Group awarded blocks

December 20, 20194

Exploration Drilling – 7/11-1 Cod Field Discovery

1967 1968 1969 1970 1971 1972

• 250 ft of gas and condensate

• Paleocene sand

• Average porosity 20%

• Water saturation 25-35%

• Good flow potential tested throughseveral DST’s

December 20, 20195

Exploration Drilling – Cod Appraisal

1967 1968 1969 1970 1971 1972

• Inplace estimates• 700 BCF and 50 million barrels condensate

• Disappointing results from 7/11-3 and 4

• Too small for sole development

• Uncertain gas market and transport solution

7/11-1 7/11-2 7/11-3 7/11-4

December 20, 20196

Exploration Drilling – 2/4-1

1967 1968 1969 1970 1971 1972

2/4-1

Well kicked at 5450’

Needed to P&A

December 20, 20197

Exploration Drilling – 2/4-2

1967 1968 1969 1970 1971 1972

2/4-1 2/4-2

Aftenposten 28. oktober 1969

Ekofisk Discovery – Entered Reservoir October 25, 1969

December 20, 20199

Ekofisk – Discovery

1967 1968 1969 1970 1971 1972

2/4-1 2/4-2 2/4-3 2/4-5

2/4-4

2/4-1

2/4-2

2/4-4

2/4-3

2/4-5

Ekofisk fm

Tight Zone

Tor fm

• Reservoir Thickness – up to 800ft

• Initial pressure – 7100 psi

• Porosity – 25-45%

• Matrix permeability – up to 2md

• Effective permeability – 10 to 20 times higher

• Initial volume estimates – 4,5 to 6 billion barrels

• Excellent productivity from DST’s

• Recovery factor – 17 to 22%

December 20, 201910

Exploration Drilling – 4Q 1970 – Three Discoveries Made

1967 1968 1969 1970 1971 1972

2/4-6

2/5-1

2/7-1

2/4-7

• 2/7-1 Eldfisk discovery

• 2/4-6 West Ekofisk discovery

• 2/5-1 Amoco Tor discovery

• 2/4-7 Tor appraisal into PL018

• 2/7-4 Edda discovery

• 1/6-1 Albushell discovery2/7-4 1/6-1

December 20, 201911

Greater Ekofisk Area – Discovered Resources ≈14 Billion BOE’s.

1967 1968 1969 1970 1971 1972

West Ekofisk

Tor

Eldfisk

Edda AlbuskjellEkofiskCod

Oil - 10,5 billion barrels

Gas - 3,5 billion barrels oe

December 20, 201912

1971 Early Test Production – 18 Months After Discovery

• From four subsea wells

• Provide reservoir information for field developmentplanning

• Test fractured chalk production behavior

• Provide offshore operational experience

December 20, 201913

Prime minister Bratteli marks first production

December 20, 201914

Greater Ekofisk Area Fields – First Oil 1974

15

2// J 2// M 2// Z 2// L 2// X

2// FTP 2// Q 2// C 2// B H

2// T

2// K 2// B

Ekofisk-funnet Oppstart av produksjonen

Rørledning til Teesside, Storbritannia

Alexander L. Kielland-ulykken

Oppjekking av Ekofisk-senteret

Ekofisk II Vanninnsprøyting på Eldfisk

Oppstart av Ekofisk Sør-prosjektet

Eldfisk II oppstart 50-årsjubileetStart av vann-innsprøyting på Ekofisk

Ekofisktanken ankommer Ekofisk

Ekofisk 2/4 M settes i produksjon

Fjerning av Ekofisk I installasjoner starter

Ekofisk LOFS – 4D seismikk

Rørledning til Emden, Tyskland

1973 The Start of the Concrete Era

December 20, 201916

1975 Oil to Teeside1977 Gas to Emden

17

Bravo blow-out

1977

December 20, 201918

Alexander L. Kielland disaster

1980

Seabed Subsidence in the Greater Ekofisk Area

19

2/4-T

1974 1985 2006

B A

Seabed subsidence of2-2,5 meters observed

Jacking up of 6 steel platforms on the fieldcenter in 1987

Protective wall installed at the processingunit in 1988.

Consequence of Seabed Subsidence

20

December 20, 201921

Greater Ekofisk Area – Preparing for a Long Future

22

Ekofisk Area Production

Ekofisk:4,2 billion BOE

Other: 0,8 billion BOE

Eldfisk: 1 billion BOE

Cumulativeproduction6 billion BOE’s

>1000wells drillled

BOE pr day

EkofiskGrowth

Discovery

Ekofisk test production

Permanent Installations

Ekofisk ComplexJacking

EkofiskWater injection pilot

Ekofisk Waterflood Start EkofiskSouth

Ekofisk II

23

Total value creation – Greater Ekofisk Area 1969 – 2018

Total Value

Creation from the

Greater Ekofisk Area

amounts to NOK

2424 billion*

110 billion NOKEmployees

44 billion NOKLenders

Owners

245 billion NOK

Goods and services

859 billion NOK

Taxes and fees

1166 billion NOK

* Stated in 2018 NOK value/ Real 2018 NOK

24

Ekofisk – Fractured Chalk Reservoir

“White”

Fractured

Highly porous

Soft

Tight

25

Chalk Exposures – French Coast

26

Chalk - SEM images

27

Fractures

Person for scale

~3000m

~70m

~11 km

~5 km

~300m reservoir thickness

Ekofisk Field

28

December 20, 201929

Ekofisk Oil Production History

EkofiskGrowth

Discovery

Ekofisk test production

Permanent Installations

Ekofisk ComplexJacking

EkofiskWater injectionpilot Ekofisk Waterflood Start Ekofisk

South

Ekofisk II

December 20, 201930

Waterflood Evaluations – What’s the big deal?

1987 • Few, if any, waterfloods in fracturedchalk

• Will water prematurelybreakthrough?

• Will matrix imbibe water?

• What happens when we put water on chalk?

• Sustained acceptable injectivity?

Pilot testing

Waterflood Efficiency

Initial Water

Residual hydrocarbon

Initial Water

Imbibed water

Imbibed water

Residual hydrocarbon

Initial Water

Imbibed water

Residualhydrocarbon

Laboratory experiments initiated late 1970’s

Only Tor formation showed waterflood potential

Upper Ekofisk fm Lower Ekofisk fm Tor fm

December 20, 201932

Water injection1987 Field testing

- Multi year injection/production testing- Evaluate large scale recovery efficiency- Evaluate operational risk

Project sanctioned- Significant infrastructure investment- Viewed as high risk- Authorities and owners cooperated to reduce project value risk- Phased development

December 20, 201933

Ekofisk Waterflood

• Water injection capacity increased from 350,000 to 850,000 bwpd

• Number of injection well slots increased from 30 to 50

• More than 5 billion barrels of water injected

December 20, 201934

Ekofisk Waterflood – Main Enabler for Increased Recovery

EkofiskGrowth

Discovery

Ekofisk test production

Permanent Installations

Ekofisk ComplexJacking

EkofiskWater injectionpilot Ekofisk Waterflood Start Ekofisk

South

Ekofisk II

Depletion path?

December 20, 201935

Reservoir Compaction – Introducing Water Weakens Chalk

C11A

December 20, 201936

Ekofisk Field Management

Reservoir Pressure

Water Injection Rate

Seabed Subsidence Rate

December 20, 201937

Joint Chalk Research Program – 1985 to 2010

• Unknown geological territory

• Limited analog experiences

• Real challenge to effectivelyproduce

• Large resource base

• Low projected recoveryfactors

• Initiated by NPD and DEA -Norway and Denmarkknowledge share

• Improve geologicalunderstanding

• Wellcompletions/stimulations

• Wellbore stability

• EOR – water and gas injectionefficiency etc

• Geomechanical behavior ofchalk

• Fracture characterization

• Sponsored by chalk operators and license owners

• Total spend – 100 mmnok

• Research performed by

• Academia

• Commercial laboratories

• Company laboratories

• Company staff

Why What Who

17% 52%44%Ekofisk

Initial Assumption

Current plan

15% 33%26% ?Eldfisk

• Infill drilling

Significant Remaining Resource Potential

?

38

Oil In PlaceProduced

Increasing the Recovery Factor

6,7 B STB

2.8 B STB

Note: Arrows on Ekofisk and Eldfisk do not account for the relative size of the fields

Remaining Potential

(Movable Oil)

• EOR ?

• Optimize waterfloods

December 20, 201939

Permanent seismic cables over the Ekofisk reservoir

• Optical system installed in 2010

• 4000 receivers

• 98.8 % of sensor stations still active

• 17 surveys acquired so far

December 20, 201940

4D Seismics – Monitoring Injection Fronts to Locate Bypassed Oil

2011 2018 4D Differences Upper Ekofisk Water Front Mapping

Large change

No change

41

EOR – Continued Efforts

Gas Injection

Water Injection ✓

N2 Injection

EOR Screening

Air Injection

HC WAG

CO2

Smart Water ✓

CEOR (surfactant)

Studies Pilot Execution

GEA PAR Pre-Read - Confidential

Recent focus on

• Water additives for residual oil reduction

• Adjust water composition

42

Thank You

500,000 barrels of water per day

Offshore

Three fields in production900-1000 people

175,000 barrels of oil equivalentper day (gross)

Production

Water injection

ConocoPhillips 35.1 %Total 39.9 %

Vår 12.4 %Equinor 7.6 %

Petoro 5.0 %

Ownership in PL018