Norway’s first female drilling supervisor Tax agreement reached on waterflooding

Negotiations over waterflooding

by the Norwegian Petroleum Museum

Initial water injection into the Ekofisk reservoir had begun in 1981 to measure its effect on the recovery factor for oil and gas. A preliminary study was also initiated to arrive at a realistic cost for implementing a large-scale waterflood project compared with its potential benefits.

— Ekofisk 2/4 K and Ekofisk 2/4 B. Photo: Husmo Foto/Norwegian Petroleum Museum

Phillips concluded that this would not be commercially profitable under the prevailing assumptions. The licensee group then began negotiations with the Norwegian Petroleum Directorate (NPD) and the Ministry of Petroleum and Energy (MPE) on possible changes to the tax rules covering North Sea development projects.

The MPE was basically unwilling to give any exemptions from the normal tax regime. But both it and the NPD had long been concerned to achieve water injection as part of offshore depletion policy.

In their view, implementing the project would be good national resource utilisation. Building the Ekofisk 2/4 K injection platform would also provide welcome work for Norwegian industry. But discussions between licensees and government proved long and difficult. Agreement was not reached until 9 August 1983.[REMOVE]Fotnote: Kvendseth, Stig S, Giant Discovery. A History of Ekofisk Through the First 20 Years, 1988: 194-196.