First production from the Greater Stella Area development in the UK North Sea has been set back once again.
Sail-away of the FPF-1 floating production facility is expected to be delayed by six-12 weeks due to slippage in completion of certain commissioning milestones in the Remotowa shipyard in Poland, says operator Ithaca.
Some marine system re-work was also needed to ensure the vessel meets the required sail-away certification standards, said the firm. The result is the first production is now anticipated in Q3 2016.
Costs relating to the delays are set to be born by contractor Petrofac, due to a contract cap cost. Under its incentivized contract with Ithaca, Petrofac could earn up to $34 million dependent on the timing of sail-away of the FPF-1, with the maximum payment achieved for delivering sail-away from the shipyard prior to the end of March 2016 and reducing to zero for sail-away after 31 July 2016.
All the subsea infrastructure that is required to be installed prior to the arrival of the FPF-1 on location is in place and all five Stella development wells have been successfully drilled and tested.
Despite the set back, Ithaca is positive about the GSA area. It recently acquired a 20% stake in the license containing a large part of the BP-operated Vorlich discovery from Total. Vorlich straddles two licenses which means Ithaca’s stake amounts to an about 17% stake in the Vorlich field.
Vorlich is about 10km from the GSA hub and contains 20-30 MMboe estimated gross proven and probable reserves. The Vorlich appraisal program was completed in 2014, with submission of the field development plan scheduled for late 2016.
Ithaca expects 2016 production to be about 9000 boe/d (95% oil). Average production in 2015 totaled about 12,100 boe/d – exceeding full year guidance of 12,000 boe/d.
Les Thomas, Ithaca's CEO, said: ““We remain confident that good returns can be made in the North Sea, with a rigorous, cost and risk conscious approach to selective investment in high quality assets. We believe that today’s difficult environment actually provides an opportunity for the company as a focused player in the sector, as demonstrated by the acquisition of our interest in Vorlich.”
Read more
Image: The FPF-1 at the Remontowa yard in Poland.
Subscribe
