The Press and Journal (Inverness, Highlands, and Islands)
First oil flows from ‘exhausted’ field
Production marks return to growth for BP’s North Sea activity
A PIONEERING seismic technology project has started to produce its first oil in a glimpse of a rosier future for the North Sea. BP is reaping the rewards from a multi-billion investment in fields considered exhausted just a few years ago.
It hopes the Quad 204 initiative will extend production by 20 years or more.
Another 450million barrels of oil are expected to be taken from the Schiehallion field, 110 miles west of Shetland, helping the firm’s North Sea operation return to growth. The announcement is the most significant of a string of recent advances to ensure the sector’s continued role in the region’s economy.
Oil major BP is celebrating the start of production from Quad 204 – one of the largest field redevelopments in North Sea history.
Operator BP and partners Shell and Siccar Point Energy expect the megaproject to deliver 450million barrels of oil equivalent (boe) from the Schiehallion and Loyal fields through to 2035 and beyond.
BP initially set a budget of £3billion for Quad 204 but later chose to invest an additional £1.4billion to widen the subsea work scope, a BP spokeswoman said.
More than £2billion worth of contracts, about 50% of the total, were awarded to the UK supply chain following project sanction in 2011.
A team of about 450 people across offshore and onshore locations will operate the project, west of Shetland.
Start-up, the third of seven major projects BP is bringing on stream worldwide in 2017, also returns the company to growth in the North Sea. BP plans to double its UK North Sea production to 200,000 boe per day by 2020 and “sustain a material business in the region for several decades”.
The company expects first oil to flow from Clair Ridge, also west of Shetland, next year and has plans for up to five exploration wells in the UK over the coming 18 months. The Schiehallion and Loyal fields produced first oil in 1998 and went on to pump out nearly 400million barrels of oil. Output was suspended in 2013 to allow a major upgrade and replacement of subsea facilities to be carried out, while about 20 new wells were drilled.
Glen Lyon, the world’s biggest harsh-water floating, production, storage and offloading (FPSO) vessel, was built by Hyundai Heavy Industries, in South Korea, to serve the fields.
Glen Lyon can process and export up to 130,000 barrels a day, store up to 800,000 barrels, and accommodate 140 people.
It replaced the Schiehallion FPSO, which was disconnected from the field.
BP chief executive Bob Dudley said: “The start of production from Quad 204 – one of the largest recent investments in the UK – is an important milestone for BP, marking a return to growth for our North Sea business.
“As one of the series of important, higher-margin major projects that are now steadily coming on line for BP, it also underpins our expectation for growing production and cash flows from our upstream business over the coming few years.”
Mark Thomas, BP's North Sea regional president, said: “In safely delivering first oil from the