The Press and Journal (Aberdeen and Aberdeenshire)
EnQuest announces first oil from flagship Kraken field
North Sea: One of largest new fields expected to deliver 50,000 boe daily
North Sea oil producer EnQuest announced start-up on its flagship Kraken discovery yesterday, marking a major milestone in the firm’s five-year plus interest in the field.
It is one of the largest new oil fields to come onstream in UK waters since Buzzard and is expected to support more than 1,000 jobs in the UK annually over a lifespan of more than 20 years.
Kraken, where costs have plunged from the £2.5billion-plus
“This is a landmark project for EnQuest”
predicted at project sanction in 2013, is expected to deliver 50,000 barrels of oil equivalent (boe) a day to operator EnQuest (70.5%) and field partner Cairn Energy (29.5%) at peak output in 2018/19.
The field is a “cornerstone” of EnQuest’s longterm production portfolio and estimated to contain around 128million barrels of proved plus probable oil.
It lies about 81 miles east of Shetland and for years had been eagerly anticipated as one of the UK North Sea’s biggest oil prospects.
Discovered by Occidental in 1985, the asset was left undeveloped for years because recovery of its accumulations of hard-to-extract heavy oil was too expensive and technically challenging.
The Department of Energy and Climate Change approved a development plan in November 2013.
Hailing first oil yesterday, business and energy secretary Greg Clark said: “This is a landmark project for EnQuest and the UK oil and gas sector as one of the largest new oil fields to come on-stream in the North Sea in a decade.
“This has been made possible through significant UK Government support worth £2.3billion over two years to encourage investments of this type in the North Sea, supporting thousands of highly-skilled jobs. We’ll continue to build on this support for the oil and gas sector as it looks to seize the significant opportunities that lie ahead.”
Scottish Secretary David Mundell added: “This is fantastic news and will help ensure skilled, secure jobs in the vital North Sea oil and gas industry.”
“We stand ready to continue to support the industry as its seizes this tremendous opportunity.” The Kraken area – Kraken and Kraken North – is estimated to have 3% of remaining UK oil reserves, 2% of total oil and gas reserves and, at peak, will be responsible for 3% of total UK oil and gas production.
EnQuest bought into the asset early in 2012, acquiring a 20% stake from Canamens Energy North Sea.
Kraken is EnQuest’s seventh operated production hub and its floating production, storage and offloading vessel – a converted tanker – has the largest liquid handling capacity in the UK North Sea.
It left the Keppel Offshore and Marine yard in Singapore in October and arrived on site in February.
After thousands of job losses in the North Sea, the news that EnQuest’s Kraken field has gone on-stream brings further hope the industry is set for a revival.
The discovery, to the west of Shetland, was first made 30 years ago but was deemed too challenging to develop.
But now, just weeks after Hurricane Energy made the biggest untapped oil find in years, the first oil has been produced from Kraken.
While people speak of decommissioning, it is encouraging to know that investment – such as the £2.3billion put forward for Kraken, which will support 1,000 jobs over 20 years – is being made in an industry which has helped the region flourish for 50 years.