BP to spend £ 1 bn in North Sea

Oil giant BP announced plans for a massive $ 2 bn (£ 1.06 bn) investment in the North Sea this year, including the development of the giant Rhum field in the central North Sea, the largest untapped gas reserves in British waters.
The company plans to deploy six mobile exploration drilling rigs across the UK continental shelf in a potential major boost for Britain's offshore industry and to further develop the Clair oilfield in the Atlantic frontier. And the company also revealed that its total capital and operating investment in the UK North Sea over the next four years is now expected to top $ 7 bn.

A spokeswoman for the company said: "BP intends to invest $ 780 mm of capital into a range of projects and activities. In addition, $ 1.2 bn will be invested in operating, supporting and maintaining its producing assets. An important element of the 2005 plan will be the operation of up to six mobile drilling rigs across the UK. BP will also be commencing a programme of platform drilling on up tosix of its assets in the UK and Norway."
"BP's programme includes development drilling for the Clair oilfield, west of Shetland, which is expected to come on-stream in the next few weeks and development of the highly complex Rhum field, the UK's largest undeveloped gas field, due to start-up in late 2005. The field, which has estimated reserves of 800 bn cf of gas, is located in the central North Sea, near the existing Bruce field."

The company's investment plans also include a major extension of the Magnus oilfield, east of Shetland, and the development of the Farragon oil discovery in the central North Sea.
The spokeswoman continued: "In addition, there will be a significant level of activity in producing fields. West of Shetland there are plans to drill infill wells in the Schiehallion field, and new injection wells in the Foinaven field. Infill drilling in the Machar field is being planned, while on the Bruce gas field, a further phase of infill drilling will be progressed. Drilling will also continue in the southern North Sea and at Wytch Farm."

"The company is also in the process of tendering a range of major long-term supply contracts to support its North Sea operations. These contracts constitute approximately $ 400 mm per year of the overall spend."
"They include contracts for well services, currently under tender; for sub-sea construction; inspection, repair and maintenance which will be awarded in the coming months; and for engineering, maintenance and modifications services, which were awarded in June 2004 to Wood Group and KBR Production Services."

Dave Blackwood, BP's North Sea business unit leader, declared: "This is an exciting programme for 2005 and reflects our belief that, within a stable business and fiscal environment, the region has a bright future."
"These investments will help us to extend the life of many of our existing fields and bring new fields on-stream to sustain healthy production levels for BP in the North Sea. They will also enable us to keep in place the infrastructure critical for future UK reserves development."

Blackwood added: "The North Sea is still a huge part of BP, and the region remains a major component of our future plans globally."
"The area is maturing, and this undoubtedly presents new challenges, but our activity and investment plans reflect our confidence in the remaining potential."