UK-based independent has now cut US$425 million off its North Sea Kraken heavy oil development budget as it looks to continue reining in costs.
After initially shaving $300 million, or about 10%, off the project's original $3.2 billion costs, the firm has made a further $125 million savings, including by reducing the number of drill centres from four to three, and with 23 wells instead of 25.
The firm, which saw production increase 31% between 2014 and 2015, to 36,567 boe/d, hopes to see that increase again in 2016 to between 44,000-48,000 boe/d and yet further when the Kraken field comes online.
EnQuest has reduced operating costs, with full year 2015 unit opex at $29.7/bbl, compared to $42.1/bbl in 2014, and it thinks that will drop again to $25–27/bbl for 2016, and into the low $20s after the Kraken development is fully onstream.
Yet, the firm still saw revenues drop 10.2% to $906.6 million in 2015, and gross profits drop $51.3 million, as it, and others, bore the impact of the plummeting oil price, which dropped from >$100/bbl in 2014, to an average $50 in 2015, and around $30-40 in 2016. In efforts to survive the low oil prices, the industry has been cutting its costs and the North Sea industry average unit operating costs have been cut from $29.3/bbl in late 2014 to an goal of $17/bbl this year, leaving EnQuest somewhat lagging.
The firm says the Kraken project is on schedule. The Kraken FPSO departed the dry dock in December and is on course for departure from Singapore in 2016 with first oil scheduled for 1H 2017.
In 2015, the integrated turret buoy was installed and the drilling program was ahead of schedule. "Drilling results show excellent reservoir correlation with subsurface expectations," says EnQuest.
In 2016, the drilling program is focused on drill centres one and two and is currently ahead of schedule, despite a particularly harsh North Sea winter. This should ensure that the planned four production and four injection wells will be available for first oil, the firm says.
On its Alma/Galia development, six production wells have been commissioned and are all expected to be onstream by early Q2 2016.
Image: The original Kraken layout. Image from EnQuest.
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