UK gives go-ahead to development of five North Sea gas discoveries

New UK Energy Minister Brian Wilson gave the go-ahead to the £ 200 mm development of five natural gas discoveries in the North Sea. Mr Wilson, was chairing his first meeting of PILOT, the joint Government and Industry forum.
The operator Conoco and its partners are further developing the Caister Murdoch System through the £ 207 mm project known as CMS III by combining their resources into a single project. This innovative way of working has been fostered by PILOT and the project is expected to come to fruition at the end of 2002 when the first natural gas comes on shore.

Granting DTI consent for the project Mr Wilson said: "This investment by Conoco and its partners has been made possible by imaginative thinking and working in partnership. This is clearly the way forward for the UK Continental Shelf and is further evidence that PILOT is making a real difference. "I particularly welcome the boost this will give to the whole supplier network in the UK which will benefit from contract awards ina number of areas including drilling, pipe laying, specialist sub sea equipment and fabrication."
"I am very pleased to take over as Chair of PILOT. I have taken a keen interest in the oil and gas industry for many years and I am delighted to return to it as Minister for Energy. "Today's announcement is welcome news. However, as I clearly indicated at the meeting today, PILOT and the industry now need to work very hard to build on this and I look to them to make determined efforts to secure more developments on the UK Continental Shelf."

PILOT, the successor body to the OGITF was established in January 2000 to ensure that the OGITF deliverables and vision are achieved. PILOT is made up of twenty-three key Government representatives and recognised leaders from the industry and meets on a quarterly basis.
The Industry Leadership Team (ILT) was formed in 1998 to represent the oil and gas industry supply chain and unions during the deliberations of the OGITF and now continues in PILOT. It is made up of twenty-one key figures from across the industry, including operators, contractors, suppliers and unions.

To make PILOT's vision a practical reality, specific deliverables were defined. The strategy is for 10 years of Industry/Government co-operation aimed at achieving the following outcomes in the year 2010.
-- Maintenance of a production level of 3 mm boepd
-- £ 3 bn per annum invested
-- Prolonged self sufficiency in Oil & Gas
-- Up to more than 100,000 more jobs than otherwise would have existed
-- 50 % increase in exports (by 2005)
-- £ 1 bn per annum additional revenue from new business CMS III

A potential 500 bn standard cf of natural gas from the Hawksley, McAdam, Murdoch K, Boulton H and Watt reservoirs will be produced through sub sea wellheads and flowlines to the adjacent Murdoch production platform.
From there, the existing Caister Murdoch System (CMS) pipeline will transport it 115 miles to the Conoco-operated Theddlethorpe Gas Terminal in Lincolnshire, England. In order to facilitate development and simplify the ownership profile, Conoco and its co-venturers have unitised their respective interests in the five reservoirs into agreed holdings in a single project.
The CMS III project will consist of two main elements. These are:
-- a £ 147 mm ($ 212 mm) satellites development, comprising sub sea wellheads, flowlines and control systems required to produce natural gas back to the Murdoch platform for processing, and
-- a £ 60 mm ($ 86 mm) separate accommodation platform and a new compression module for the Murdoch field. Enhanced compression facilities will cater for the CMS III production and provide capacity for future natural gas developments in the area.

The Conoco-operated Caister and Murdoch natural gas fields, which are located 115 miles north east of Lincolnshire, England, entered production in October 1993. The participating interests are Conoco (UK) (operator) 42.25 %; Consort Caister 24.5 %; GDF Britain 16.25 %, and Tullow ExplorationLimited 17 %.
Participants in the CMS III development are Conoco (UK) (operator) 59.5 %; GDF Britain 26.4 %, and Tullow Exploration 14.1 %.