The U.K. North Sea saw a very quiet 2016 in terms of field development activity, but this year has started at a decent pace.

Ithaca Energy and Premier Oil are pushing ahead with projects; however, Chevron is rethinking its Rosebank plans West of Shetland.

Ithaca Energy has launched the North Sea Harrier Field development program, with development drilling due for completion in 2017. First production is expected in second-half 2018. On top of this, the project will be developed for half of the original estimate, according to Ithaca. Investment in the Harrier Field development project will start this year. The development involves drilling a multilateral well into two reservoir formations on the field. The well will be tied back via a 7.5-km (4.7- mile) pipeline to an existing slot on the Stella main drill center manifold for onward export and processing of production on the FPF-1 unit.

“The Greater Stella Area (GSA) joint venture has contracted with Ensco Offshore UK for the provision of a heavy-duty jackup drilling rig, which is expected to arrive on location in the second quarter of this year,” Ithaca stated. “The drilling program is forecast to be completed in the second half of 2017 and the subsea infrastructure installation activities in summer 2018, resulting in the anticipated startup of Harrier production in the second half of 2018.”

The net capex associated with execution of the development over 2017-2018 is about $75 million, “equating to a development cost significantly less than $10/boe,” the company stated.

“This represents a cost reduction of approximately 50% from that originally forecast. The substantial reduction in [capex] is driven by both detailed well engineering design work that has enabled the move away from drilling two individual wells to one multilateral and securing attractive contracting terms across the supply chain,” Ithaca said.

Ithaca’s forecast 2017 capital investment program of $70 million is “primarily centered on GSA activities” but includes development drilling on the Harrier Field. The forecast 2017 unit opex of about $18/boe is down nearly 30% on 2016 due to “the positive impact of low-cost Stella volumes on the production portfolio.”

“The painstaking electrical inspection program on the FPF-1 is nearing completion, and the vessel will be ready shortly for startup of the Stella Field,” Ithaca CEO Les Thomas said. “While this will have taken longer than planned, the transformational step it delivers for the business remains undiminished. The company moves into 2017 in good health, with increasing cash flow, continued deleveraging and the launch of the lowcost Harrier satellite development.”

With the electrical junction box inspection and remediation work program nearing completion, forecast first hydrocarbons from the Stella Field is scheduled for February 2017, Ithaca said.

“Production this year is anticipated to be in the range of 19,000 boe/d to 22,000 boe/d, reflecting the updated Stella startup schedule,” the company added.

“The producing asset portfolio has performed well over the last 12 months, with production running ahead of guidance largely as a result of solid performance from the Cook Field, for which the company took over operatorship in March 2016.”

Ithaca’s forecast net capex for 2017 is about $70 million. Most of this is allocated for Harrier development activities, completion of the GSA oil export pipeline investment program and Vorlich Field development planning activities. “The forecast expenditure is also inclusive of any additional Stella startup costs, which are expected to be minimal,” Ithaca said.

Premier cuts Catcher costs

Premier Oil said costs have been reduced on its North Sea Catcher Field development, while production has increased by nearly 25%. “The Catcher project continues to progress well and will provide another step change in production, generating enhanced tax-free cash flows for the group,” said Premier Oil CEO Tony Durrant.

The operator said Catcher is on schedule for startup later this year with total capex now forecast at $1.6 billion, 29% lower than the estimate when the project was sanctioned. Premier also said that approval of the U.K. Tolmount development concept is expected shortly and “will provide a next phase of growth.”

The company registered record production of 71,400 boe/d in 2016, a rise of 24% on 2015. The figures are “in line with previously upgraded guidance.” The 2017 production guidance is 75 Mboe/d “before any contribution from Catcher and adjusted for lower Solan profile,” Premier added. Opex per barrel for last year was $15.70/bbl, while Premier’s estimated capex in 2016 was $690 million, which was below the guidance of $730 million. The 2017 capex guidance is $350 million, including abandonment spending.

Chevron rethinks Rosebank

Chevron Corp. is considering launching a new tender for an FPSO vessel for its Rosebank development project West of Shetland.

Chevron axed its order for an FPSO vessel with Hyundai Heavy Industries (HHI) in December 2016. A termination notice cancelled the deal, which was valued at about $1.85 billion. Chevron signed the original contract in April 2013.

But one month after the cutting of the HHI deal, Chevron was reported to be preparing to launch a new FPSO tender. The retender will be a cost-saving exercise as 2013 prices were much higher than the present day. Indeed, a spokesman for Chevron North Sea said recently that the operator “is committed to working with its project joint venture participants and stakeholders to improve project value and make the right decisions for the Rosebank development.”

Chevron also recently said FEED work for the Rosebank project is continuing. Rosebank’s development plan includes an FPSO vessel, production and water injection wells, subsea facilities, and a gas export pipeline.

The Rosebank Field was discovered in 2004 and is estimated to contain recoverable resources of 240 MMboe. Rosebank is located 130 km (81 miles) west of Shetland. Chevron operates Rosebank with a 40% stake, while Suncor Energy holds 30%, Siccar Point has 20% and Dong E&P holds 10%.

Editor’s Note: This article first appeared in Subsea Engineering News in January 2017. To subscribe to the newsletter, visit www.epmag.com/M66ENP.

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