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UK: High hopes for extreme-north offshore oil well

An oil well to be spudded this summer in the UK's far-north waters could, if hopes are fulfilled, lead to a surge of exploration in the new Atlantic-margin frontier province

The well will be into Chevron's Lagavulin structure in Block 217/15, on the edge of the continental shelf and more than 200 km north of the Shetland Islands.

Lagavulin, lying in just over 500 metres of water, is said to be a structure 36 km wide with an area of up to 365 square km. Chevron estimates that, on a P50 basis, it could hold over 2bn barrels of oil in-place, with recoverable reserves of 0.578bn barrels. The well will be drilled by the Stena Carron drillship, a harsh-environment unit operating under zero-discharges-to-sea permits, which Chevron has on long-term contract.

Companies with an appetite for far-north risks could join the project, because Chevron is seeking a farm-in partner. The partner will earn part of Chevron's 60% interest in the P1196 licence, covering Blocks 217/10, /14 and /15, by contributing to the costs of the well – estimated to total $90m. Chevron says the new partner will have the automatic right also to join its P1165 licence, covering Blocks 217/3a and /4a, where the Stena Carron is due to drill the follow-on well into the Talisker prospect.

Present interests in P1196 are Chevron, 60%, OMV, 20%, Faroe Petroleum, 10%, and Idemitsu, 10%; while P1165 interests are Chevron, 75%, Faroe Petroleum, 12.5%, and Idemitsu, 12.5%.

Chevron is already operator of an oil-production prospect in the Atlantic margin – the Rosebank-Lochnagar field, extending across Blocks 205/1 and 213/27. The field, about 130 km northwest of the Shetland Islands and lying under 1,115 metres of water, saw appraisal drilling last year. The firm says engineering feasibility studies are continuing this year, with a final investment decision due in 2013 and first oil targeted for 2017.

Meanwhile, Total's decision in March to go ahead with the joint development of the west-of-Shetland Laggan and Tormore gasfields, extending through Blocks 206/1a, 205/4b and 205/5a, has raised prospects for other gas developments in the area, which might share its new infrastructure (PE 3/10 p26). Dong Energy's Glenlivet discovery, at a water-depth of 461 metres in Block 214/30a, is one – the company drilled two sidetrack appraisal wells late last year and is studying the development potential. Also late last year, OMV carried out sidetrack-appraisal of its Tornado gas and oil discovery in Block 204/13, where the water is 1,048 metres deep, and is studying its potential.

Total started awarding contracts for the Laggan-Tormore development immediately after the go-ahead decision. Corus won the $297m contract to supply 18-inch and 30-inch pipe-sections for the 500 km landing system, while FMC won the $210m subsea contract, covering the supply of nine trees, eight wellheads, two six-slot manifolds and multiphase meters and controls. The facilities will be installed – by Heerema – at a water-depth of 600 metres in "one of the harshest environments of the UK continental shelf", FMC said. The award of the contract for the new receiving terminal, to be on Sullom Voe, was awaited last month.

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