They know something about sailing and working at sea. And the Norwegians have been drilling in the North Sea for 60 years or so.

In the image above, note how subsea systems have evolved — 1970’s massive oil platforms have given way to subsea well completions…

Now the Norwegians are ready to take it to the world. And the world is going to buy Norwegian goods, because some of that stuff is just too good not to own. Here is an example…

Norway’s StatoilHydro

Norway has many outstanding firms that set world standards in the offshore business. One company is StatoilHydro, a recent merger of the state oil company Statoil and Norsk Hydro. At the recent Offshore Technology Conference in Houston, StatoilHydro received an award for its work in developing a massive gas field in the North Sea, called Ormen Lange.

Ormen Lange lies under waters between 2,500-4,000 feet deep. Statoil drilled 24 wells to recover 70 million cubic meters of natural gas per day and pipe it all dozens of miles ashore to a facility in Norway. Then the gas gets piped through a 48-inch pipeline under 725 miles of North Sea to Britain. Easy, right? Ummm. No.

Think of it in terms of building the Alaska Pipeline — underwater.

Everything about Ormen Lange is big and impressive. The water is deep. The drilling is difficult under the furious North Sea. The bedrock geology is tricky. Producing gas requires complex machinery be installed on the seafloor. There are long pipe runs, with some pipe lying on the seabed at 35 degree angles.

Moving the natural gas to England is a world-class feat in and of itself, through the longest subsea pipeline in the world.

Still, in the global scheme of things, Ormen Lange is just one project in this world. And there are dozens more like it in the offshore realm. The capital expenses for new energy projects are gigantic. Everything costs big bucks now. Prices are rising for steel, cement, equipment, machinery, cost of capital, labor (if you can find trained labor). The numbers are mind-boggling. How mind-boggling? In one talk, our buddy Matt Simmons mentioned it will cost $100 trillion over the next seven years to fund the energy projects the world needs.

Until we meet again,

Byron King

Note: Byron King is a frequent contributor to the free e-letter Whiskey & Gunpowder. To receive daily insights into energy, oil, commodities and other natural resources sign up here!

Source: Just Like Building the Alaska Pipeline, Underwater