Maersk milestone with first drilling at Culzean gas field

Find hailed as biggest in UK sector in 10 years at its 2008 discovery

Maersk Oil said yesterday it had achieved a milestone in its £3billion Culzean gas development in the central North Sea.

The Danishcompany announced the start of drilling on the first of six planned production wells on the high pressure/high temperature field.

Continuous drilling activity is expected over the next five years, with first gas slated for 2019.

Gretchen Watkins, who takes over as chief executive of Maersk Oil from Jakob Thomasen this weekend, said: “This is an important milestone in ensuring that we can deliver Culzean on schedule, and with it 5% of UK gas demand in 2020/21.

“It’s great to haveMaersk Drilling as apartnerandtogether we are working to ensure a safe drilling programme on this critical project for Maersk and the UK.”

The Maersk Highlander rig is drilling the first well through a wellhead platformjacketandaccessdeck which were installed earlier this year.

When the three topsides are installed in 2018 and hooked up in 2019, three of the six production wells will be ready for first gas. The drilling campaign will be supported by more than 30 UK-based well services companies.

Culzean, 145miles east of Aberdeen, washailed as the biggest find in the UK North Sea in 10 years at the time of its discovery in 2008.

OperatorMaersk Oil has a 49.99% stake in the development, alongside BP ( 32%) and JX Nippon (18.01%).

They are targeting resources estimated at 250300million barrels of oil equivalent, with peak production forecast to meet 5% of the UK’s total gas needs.

Maersk’s “milestone” announcement coincides with plans to review the scope and scale of the head office operation over the next three months.

The firm said: “Despite a solid operational business performance, which saw the company return to positive earnings in the second quarter of 2016, Maersk Oil needs to continue to adjust the business to the continued low oil price.

Announcing the review would be completed before the end of the year, Maersk, part of A.P. Moller-Maersk Group, said an initial phase of restructuring would – subject to consultation and local labour laws, reduce its technology and projects group by the end of October.

Ms Watkins added: “We fully recognise this announcement will be unsettling for our employees.

“By taking swift action we hope to minimise uncertainty and ensure focus continues, near term, on safe and efficient operations and continued execution of our world-class project portfolio in the North Sea.

“We are performing well in spite of the market, and we want that to continue.”

“Drilling activity expected over next five years, with first gas slated for 2019”