BP Gives New Hope to North Sea Oil Revival as Extraction Begins from one of Largest Projects in Recent Years
BP has started extracting oil from one of the largest new North Sea projects in recent years in a revival for the declining oil basin.
The development follows BP’s $4.4bn (£3.4bn) upgrade to the Schiehallion field in the West of the Shetland islands. The area also holds BP’s major new gas field project at Clair Ridge.
Schiehallion has produced 400 million barrels of oil since it was first developed in 1998, but new drilling technology could now unlock a further 450 million barrels of oil and gas from the licence, known as Quad 4, which would extend the life of the fields for decades.
The West of Shetland basin is considered a strategically important region in keeping North Sea activity afloat. It has already attracted interest from majors BP, Shell and Total as well as rising upstart oil explorers Siccar Point Energy and Hurricane Energy.
BP chief executive Bob Dudley said the “important milestone” for the group marks a return to growth for its North Sea business.
The group is planning to double its UK North Sea production to 200,000 barrels of oil equivalent a day by the end of the decade and has promised to hold a material business in the region for several decades.
To revive its UK production, Mark Thomas, BP’s head of North Sea business, said the upgrade was one of the largest ever UK mid-life offshore redevelopments. It included building the world’s largest harsh water oil vessel, the Glen Lyon. The 100,00 tonne floating facility is capable of processing and exporting up to 130,000 barrels of oil a day and storing up to 800,000 barrels of oil.
“BP has developed a strong track record of finding, developing and operating big offshore oil resources west of Shetland – we have and will continue to use the latest technology to maximise recovery from the Schiehallion Area,” he said.
BP is one of the longest-standing ‘supermajors’ operating in the North Sea after its oil discovery in the Forties oilfield in 1970 helped kickstart the UK’s oil boom years.
In the wake of the oil price crash almost three years ago BP has started exiting older areas of the aging basin to focus on fresh projects where profit margins are more substantial.
Over the next 18 months, BP said it plans to participate in up to five exploration wells in the Schiehallion area, in addition to drilling approximately 50 development wells over the next 3-4 years.
Deirdre Michie, the chief executive of industry group Oil and Gas UK, said the project endorses its belief that the North Sea still offers potential with the right investment.
“Our faith in the long term health of the basin is well founded,” she said. “It’s also extremely heartening to see one of the original explorers of the basin using new, ambitious approaches and pioneering technology to help lead a revival in production.”
Source: www.telegraph.co.uk
