UK independent operator Premier Oil says it has cut costs on its North Sea Catcher floating production project by 15% - and the project remains on schedule.
Forecast gross capex to first oil is now anticipated to be about US$1.35 billion, a reduction of around 15%, compared to when the project was sanctioned.
Other operators, on projects less further down the development process, have managed to shave off up to 50% of costs, such as Statoil, on its Johan Castberg project. CEO Eldar Saetre said costs had been cut to around $6 billion, compared to earlier estimates of $11.3 billion. Statoil is yet to make an investment decision. Indeed, on its own Sea Lion project in the Falklands, Premier has cut costs from a $5.2 billion price tag, for a tension leg platform development, in 2014, to a $1.8 billion to first oil phased project, which the firm is also still looking to cut costs on.
The Catcher area is expected to produce 96 MMboe, with a peak production rate of around 50,000 bo/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.
Premier, which expects first oil from the project in 2H 2017, says cost savings have come from reductions negotiated on contracts, the release of contingencies as work program have completed, and the re-phasing of some contractor payments and work scopes, thanks to progress made to date on the subsea installation campaign, as well as drilling results.
Drilling templates have now been installed subsea and drilling on the first template completed, with drilling on the four wells on it meeting or exceeding expectations, says Premier. Drilling on the Burgman template is due to start soon.
Installation of the flowline bundles, towheads and mid water arches is in progress. The dynamic risers and umbilicals are on track for delivery in June and it is expected they will all be installed in 2016, ahead of schedule. Meanwhile, the floating production system offloading buoy is on its way to north east Scotland and, together with the mooring system, is also on track for installation this summer.
Delivery of the FPSO hull to Singapore is expected by July and progress in manufacturing of the topside units has been good, says Premier. Sailaway remains on track for the 2017 field start up.
Sea Lion
On the Sea Lion Phase 1 project in the Falkland Islands, the 18 month FEED program, which started in January, is ongoing. The draft field development plan has been submitted to the Falkland Islands Government.
Premier says it is still looking to bring in an additional partner and make further cost savings on the project. The timing of the final investment decision remains dependent on the evolution of project economics and the oil price outlook, says Premier.
Exploration
The Ensco 100 rig spudded the Laverda/Slough prospect commitment well, near the Catcher area in the UK North Sea, in April. The well encountered 13ft of net oil bearing Tay sands at Laverda, in line with pre-drill expectations, but did not encounter any indications of hydrocarbons in the deeper, high-risk Slough prospect.
The well is now being plugged and abandoned ahead of the rig continuing development drilling at the Catcher area.
Premier plans to drill the Bagpuss heavy oil exploration prospect in the Moray Firth in the UK North Sea in June, using the Ocean Valiant drilling rig, which is currently operating at Solan.
Solan
First oil from the Solan, west of Shetland development P1 production well was achieved on 12 April. The well achieved rates of 8000b/d on natural flow before rising to 14,000 b/d following the successful commissioning of the down hole pump.
Production was then shut down to complete the additional works required for second oil: the tie-in of the second water injector was completed with final commissioning of the water injection system underway, while the downhole completion for P2 is now being installed with tie in of the well planned for early June.
Resumption of production is scheduled shortly after, with the Solan field expected to reach production rates of 20-25,000 b/d in Q3, when both pairs of producer-injector wells will be on stream.
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