UK approves BP-operated Clair Ridge project
by Phaedra Friend Troy
The UK government has approved the BP-operated (NYSE:BP) $ 7 bn (£ 4.5 bn) Clair Ridge project, the second development phase of the Clair field in the waters west of the Shetland Islands.
Targeting the northern part of the oil accumulation, the Clair Ridge project will install one drilling and production platform and one quarter platform linked by a bridge on the field in 2015. With a peak production of 120,000 barrels of oil a day, the Clair Ridge platforms will provide a hub for future expansion.
Capable of processing up to 640 mm barrels of oil over 40 years, the new installation is slated to start production in 2016. Additionally, the development incorporates the first-ever use of advanced LoSal enhanced oil recovery that will reduce the amount of salinity of the water before re-injection and increase oil recovery.
“I am delighted to give the go-ahead for this project; this investment is great news for Aberdeen and the country and provides a massive boost for jobs and growth," said UK Prime Minister David Cameron. "It shows the confidence that there is to invest in the North Sea - we have cutting edge technology, world class skills and expertise and a UK Government that is committed to do what we can to secure future investment.”
More Clair developments to come
Additionally, the South West Clair appraisal well proved an extension of the Clair field, strengthening Clair's position as the UK's largest hydrocarbon resource with more than 7 bn barrels of oil and gas initially in place. The 206/12a-3 appraisal well also discovered a "significant" new hydrocarbon column in an overlying reservoir horizon, which will likely support further development on the Clair field in the future.
“The results from this well look very encouraging and confirm the potential of the Clair field to produce for decades to come," said Trevor Garlick, regional president for BP's North Sea unit. “Additional development phases will likely be required to access the new segments in Clair.”
Further seismic is being planned for the field, and more appraisal wells may be drilled to better understand the extension and plan additional development of the field.
Originally discovered in 1977, BP serves as the operator of the Clair development, with partners ConocoPhillips, Chevron and Shell. Located 75 km west of Shetland, the Clair oil field spans some 220 sq km in waters measuring 140 meters deep. The first phase of the Clair development was sanctioned in 2001 and included a fixed production platform that started operations in February 2005.
Major UK investments
BP, along with its partners, is currently investing nearly $ 15.7 bn (£ 10 bn) on four UK oil and gas projects, including Devenick, Schiehallian and Loyal, Kinnoull, and Clair Ridge, over the next five years. With BP share in the projects reaching $ 6.3 bn (£ 4 bn), the company is investing the most it ever has in the UK North Sea.
“Although it began over forty years ago, the story of the North Sea oil industry has a long way yet to run,” said Bob Dudley, BP’s group chief executive. "BP has produced some five bn barrels of oil and gas equivalent so far from the region and we believe we have the potential for over three bn more."
BP believes that it can maintain production in the UK North Sea at a rate of 200,000 to 250,000 barrels of oil equivalent a day through 2030. Some of the projects the company is working on now will be producing until 2050.
Additionally, BP's investments in the UK will support 3,000 new UK oil and gas jobs, as well as sustain more than 3,500 people already working on BP's North Sea operations.
“The oil industry directly employs around a quarter of a mm people in the UK, with a further 200,000 or so jobs either supported by the economic activity of its employees, or created through the export of oilfield goods and services,” Dudley said. “These projects reflect BP’s confidence in our UK suppliers and service providers, and in the fantastic people we have working for us in our North Sea business.”
BP currently holds interest in more than 40 oil and gas fields in the UK North Sea, four onshore terminals and a massive network of pipelines.
