New oil fields to produce 30,000 barrels a day

● Developments to produce 30,000 barrels of oil a day ● New fields are expected to begin operation in 2020

Energy giant BP has announced plans to develop two new North Sea oil fields capable of producing up to 30,000 barrels a day.

The firm said investment in the Alligin and Vorlich satellite fields totalled around £420 million, with the two sites holding a combined 50 million barrels of recoverable oil equivalent. The fields, which are located close to existing infrastructure meaning they can be developed quickly, are expected to begin operation in 2020. Alligin, a two-well development west of Shetland, will be “tied back”or connected to BP’S Glen Lyon vessel. Vorlich, also a two-well development will be connected to the Ithaca Energyoperated FPF-1 facility.

Energy major BP has given a fresh boost to the North Sea sector by unveiling plans to develop two new oil fields capable of producing up to 30,000 barrels a day.

The two satellite sites hold a relatively modest combined 50 million barrels of recoverable oil equivalent and the oil giant said it would be making a total investment of about £420 million.

The vast Clair field, by way of a comparison, holds hundreds of millions of barrels and represents a long-term investment in the billions of pounds.

The two latest BP fields – Alligin and Vorlich – are located close to existing infrastructure meaning they can be developed quickly and are expected to begin operation in 2020.

Alligin, a two-well development west of Shetland, will be “tied back” or connected to BP’S Glen Lyon vessel.

Vorlich, also a two-well development in the central North Sea, will be connected to the Ithaca Energy-operated FPF-1 facility.

BP confirmed that engineering firm Subsea 7 will install the Alligin pipelines, with work expected to begin next year. Meanwhile the company is “finalising its contracting strategy” for the Vorlich project.

BP North Sea regional president Ariel Flores said: “Through our Alligin and Vorlich developments we are simplifying and accelerating the stages of delivery to improve project cycle time, reduce costs and, importantly, add new production to our North Sea portfolio.

“These projects follow on from a period of record investment by BP in the North Sea which helped deliver our quad 204 project last year and will deliver our Clair Ridge project which is planned to start-up later in 2018. While not on the same scale as Quad 204 and Clair Ridge, Alligin and Vorlich will lead to significant production gains and further demonstrate BP’S commitment to the North Sea.”

BP and Shell each hold 50 per cent stakes in Allign, while BP has 66 per cent of Vorlich alongside Ithaca Energy’s 33 per cent share.

Kevin Swann, senior research analyst at Wood Mackenzie, said: “We always expected 2018 to be a big year for UK project sanctions and early signs are encouraging. If the stars align, we could see as many as a dozen more by the end of the year.”

In February, BP posted one of the strongest years in the oil major’s recent history after the hike in the cost of crude was a tailwind behind a more than doubling of earnings.