Penguins FID Marks End of Cautious North Sea Era
Royal Dutch Shell plc’s decision to go ahead with the redevelopment of the Penguins oil and gas field marks the end of the cautious North Sea era.
That is the view of Fiona Legate, a senior research analyst at Wood Mackenzie, who described the confirmation of the redevelopment as ‘very positive’ for the North Sea.
“This is the largest FID [final investment decision] since Culzean in August 2015 and shows market confidence has returned,” Legate said in a statement sent to Rigzone.
“We are expecting up to 14 UK FIDs in 2018, Penguins is the second largest by reserves,” Legate added.
Following Shell’s announcement on January 15, Oil & Gas Authority (OGA) Chief Executive, Andy Samuel, said in a statement published on Twitter that the OGA was expecting further ‘high value’ projects to move forward to sanction this year, which will help prolong UK production for ‘many years’.
The Penguins redevelopment will see the construction of a floating production, storage and offloading (FPSO) vessel, the first new manned installation for Shell in the northern North Sea in almost 30 years. An additional eight wells drilled will also be drilled at the site, which will be tied back to the new FPSO.
A Shell spokesperson told Rigzone that it was ‘likely’ that the FPSO will be constructed in a Far Eastern yard.
“During its construction, 300 – 400 people will be employed in the UK, with a majority in the North East of Scotland supporting the project in areas such as project delivery, wells and subsea preparation work,” the spokesperson said.
“Once operational, the FPSO will have between 50 – 70 personnel on board,” the spokesperson added.
Fluor Corporation will undertake the FPSO engineering, procurement and construction contract.
The Penguins field lies within 541 feet of water, approximately 150 miles north east of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a joint venture between Shell (50 percent and operator) and ExxonMobil (50 percent).
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