BP to Move Ahead with Five UK Projects
BP is ready to move ahead with five gas field developments in the UK central North Sea this year. The British oil major is planning to develop its Atlantic and Cromarty fields in the Outer Moray Firth, the Rhum and Devenick discoveries in quadrant 9 and Kessog in quadrant 30 with minimum facility platforms, subsea wells and new pipelines.
Its Atlantic and Cromarty projects have moved a stage closer after the British oil firm submitted its environmental impact statement to the Department of Trade and Industry for the fields' joint development. Last month a deal was finalized with Amerada Hess to develop the gas fields through three-subsea wells tied back 75 km to a St Fergus processing terminal. BP, which operates Atlantic in block 14/26a, has assumed project operatorship for Amerada Hess's Cromarty field in block 13/30a. BP had looked at developing the gas reserves together with Shell's nearby Goldeneye field in a joint project. But since Shell is developing its field as a stand-alone platform and 105 km pipeline, BP's plans were revised.
The company is hoping to begin pumping gas to shore in the fourth quarter of 2003, but has stated the government's rise by 10% on North Sea profit taxes means there is no guarantee the project will progress further. BP is planning to develop two gas fields in quadrant 9 in the central North Sea for longer-term gas delivery. A spokesman for BP in Aberdeen confirmed its engineers were evaluating development of the two fields. "On Rhum we are currently working on detailed design...looking at the technical risk and looking to mitigate this," he said. "On Devenick we are evaluating the appraisal well and modelling development in parallel with Rhum until the end of the third quarter 2002." BP plans to make its development decision in October or November this year for first gas production in 2005.
Analysts at Wood Mackenzie suggest the UK supermajor could export the gas through its Miller platform. "BP has at least a tcf of gas in quadrant nine and is looking for an export route," said a Wood Mackenzie analyst. But the BP spokesman said export through Miller was unlikely and the gas would go via Bruce, its closest producing gas facilities to the discoveries in block 9/9. "Rhum will be a Bruce tie-back or a stand alone...Miller's cessation is further out than 2005." The company is also reviewing development of technically challenging gas resources in the central North Sea. On Kessog, it is evaluating technologies to exploit the high pressure/high temperature (HP/HT) gas and condensate reserves. It is working with a consortium of contractors to formulate a development concept for its 100m barrels oil equivalent of reserves. Halliburton Energy Services and Cooper Cameron are responsible for well engineering; Schlumberger and M-I Fluids are providing completion and testing experience and Baker Hughes brings multi-lateral well construction expertise.
It is currently tendering for a platform jacket and topsides on its Clair oil field project, west of the Shetland Isles. Fabrication contractors will have to wait until after June 5 for awards as BP needs to iron out some issues with the bidding parties, said the spokesman. Gas resources in BP's Foinaven and Schiehallion fields now have an export route with the opening of a pipeline to Sullom Voe and the Magnus platform in the northern North Sea. BP's concerns for the summer are focused on starting its enhanced oil recovery program at Magnus and raising production from the field.