Premier Oil says it has further reduced costs on the Catcher floating production development in the North sea, to a forecast total US$1.7 billion.
The drop, a 24% reduction on the original sanctioned estimate, comes after costs had been reduced 20% to $1.8 billion by July this year. This latest cost reduction estimate is driven by the weak sterling dollar exchange rate, given that 55% of the project’s remaining capex is denominated in sterling, says Premier, which expects yet more cost reductions thanks to the release of contingencies and allowances as work-scopes continue to be executed efficiently.
The Catcher area is expected to produce 96 MMboe, with a peak production rate of around 50,000 b/d. The development will comprise 22 subsea wells (14 producers and eight water injectors) on the Catcher, Varadero, and Burgman fields, tied back to a leased floating production, storage and offloading (FPSO) vessel, supplied by BW Offshore. Oil will be offloaded by tankers, while the gas will be exported through the SEGAL facilities.
All of the subsea equipment has now been installed, Premier said today, including the risers, bundles, towheads, manifolds, midwater arches along with the buoy and mooring system. The final spool tie-ins were completed earlier this month, completing the planned 2016 subsea campaign under budget.
Only short campaigns are now required in 2017 to tie-in wells as they become available from the drilling program and to support commissioning operations once the FPSO has been installed.
Meanwhile, drilling activities continue and work is ongoing to assess the possibility of reducing the overall well count without impacting production.
The outfitting of the FPSO continues in Keppel's yard in Singapore. Fabrication of the topside modules has been completed with 12 out of the 13 modules already lifted onto the FPSO. The final module lift is planned for later this month. The sail-away date of the FPSO from Singapore for a 2017 field start up remains on track.
Meanwhile, Premier continues front end engineering and design on the Falklands Sea Lion project. Current project breakeven price estimate is $45/bbl. Premier expects further reductions in cost estimates through market engagement.
On the firm's Solan field, production from the first producer resumed on 22 June (following a planned shutdown) and the second producer (P2) was brought on-stream on 18 August.
"While initial production capacity from the field was good, production is currently constrained at 10-13,000 b/d due to lower than anticipated water injection capability and linked underperformance from the P2 well," says the firm.
"A number of solutions are being studied to increase water injection into the reservoir which is necessary to maintain voidage replacement and reservoir pressure at higher production levels."
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