Venture Production and Sevan Marine ASA have formed a strategic alliance to jointly pursue oil field development opportunities utilising Sevan Marine's SSP floating production and storage system in the UK sector of the North Sea. Earlier this year, Venture
signed a contract on behalf of the Chestnut partners, for the use of an SSP300 in the development of the Chestnut Field for which DTI field development approval has now been received.
As part of the strategic alliance with Sevan, Venture has the option to re-use the Chestnut SSP 300 on a follow-on field development project after Chestnut has ceased production. The extension will be at a pre-determined day rate and Venture will take a 20% equity stake in the Chestnut SSP 300 unit. Furthermore, Venture and Sevan will jointly co-operate on a non-exclusive basis to pursue
additional oil field development opportunities in the UK sector of the North Sea.
Commenting on the news, Mike Wagstaff, Chief Executive said:
'Formation of a strategic alliance with Sevan to extend the use of the SSP system in the North Sea will allow Venture to capitalize on the experience aimed in developing Chestnut. It offers a simple, re-usable, low cost solution which has the potential to lower the economic threshold for economic development of 'stranded' oil fields in the North Sea. This new strategic alliance with Sevan Marine and the equity stake we are taking in the Chestnut unit, will enable Venture to push forward its well proven strategy of acquiring and developing 'stranded' fields in the North Sea and at the same time, play a part in the establishment of an innovative new offshore technology'.
The Chestnut field partners are Venture as Operator with 69.875%; Bow Valley Petroleum (UK) Limited with 15.125%; and Atlantic Petroleum UK Limited wtih 15.000%.
Chestnut is located entirely within Block 22/2a, approximately 13 km south east of the Alba field.
The Chestnut field was discovered in 1986 and the reservoir is at a depth of approximately 7,000 ft. The field has been appraised by six wells. The last of these, well 22/2a-11x was drilled in 2001 and placed on extended well test ('EWT') utilising the Crystal Ocean floating production vessel. The well produced approximately 1 million
barrels of oil during the test. The well test helped reduced the uncertainty over oil in place and reserves and confirmed the reservoir deliverability. This production well was suspended and forms the basis of Chestnut field development. A new water injection well will be drilled as part of the development.
On November 24th, Venture received Field Development Plans approval for Chestnut.