First oil from the US$2.5 billion Kraken floating heavy oil development in the UK North Sea has been announced.

The Kraken development, about 125km east of the Shetland Islands, off Scotland, is due to comprise a total 25 wells (14 for production and 11 for injection) via the Armada Kraken floating production, storage and offloading (FPSO) vessel.

Operator EnQuest said first oil was on 23 June. The 13 wells have been drilled and completed to date, comprising seven producers and six injectors, are being brought online in a phased manner, to maximise long-term productivity and value, says EnQuest. Gross peak oil production expected to be approximately 50,000 b/d.

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Kevin Swann, research manager, UK Upstream, at Wood Mackenzie said: “Kraken is the largest new field due to start in 2017 and we estimate production will average 20,000 b/d for the year. This would account for 15% of year-on-year production growth in the UK in 2017. We expect production to peak at almost 50,000 b/d in 2019, providing 4.5% of overall UK liquids production that year.”

Costs on the project have been reduced from an estimated $3.2 billion at project sanction to $2.5 billion, says EnQuest

EnQuest CEO, Amjad Bseisu said: “Drill centres 1 and 2 are fully complete and work continues on drill centre 3; as a result, further production capacity will come online into 2018, as these further wells are put onstream.”

The Kraken field is spread over 42km at a depth of 1300m below sea level, and is expected to hold 128 MMboe of gross 2P reserves, at about 14 API.

The Armada Kraken FPSO is vessel operator Bumi Armada’s first in the North Sea. It was constructed at Keppel Offshore & Marine’s yard in Singapore and has the largest liquid handling capacity in the UK North Sea.

UK regulator Oil & Gas Authority CEO Andy Samuel said Kraken has the “potential to open up additional heavy oil opportunities in the Northern North Sea, with other developments in the pipeline.”

Swann added: “Although other heavy oil fields have produced in the UK, this is the first of a batch of projects that were discovered some time ago but were previously deemed too challenging technically to develop.”

EnQuest has an interest of 70.5% in Kraken, with its partner in the development Cairn Energy having the balancing 29.5%.

Source: www.oedigital.com/