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UK authorities have given the green light to one of the largest new field discoveries in the UK North Sea – Maersk Oil’s £3 billion (US$ 4.5 billion) Culzean development.
The project has been welcomed as a “clear signal the North Sea is open for business” at a time when low oil prices has seen very few new projects sanctioned in the basin.
The high-pressure, high-temperature (HPHT), central North Sea Culzean field is the largest new field discovered in the UK North Sea for a decade, according to Wood Mackenzie Research.
The field, expected to produce enough gas to meet 5% of total UK demand at peak production in 2020-21, is also the largest gas field sanctioned since East Brae in 1990, according to Wood Mackenzie.
It is being developed using a complex of bridge linked platforms, comprising a 12-slot well head platform, central processing facilities and utilities/living quarters for about 100 people, all in about 88m water depth about 145mi east of Aberdeen.
Culzean was discovered in 2008, in Block 22/25, by Maersk Oil, and its co-venturers, and contains about 250-300 MMboe. Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000- 90,000 boe/d. The reservoir is about 4300m below sea level and about 170°C.
Its development has benefited from a new HPHT Cluster Area tax allowance introduced by the UK Government as part of its 2015 Budget and aimed at supporting the development of HPHT projects and encouraging exploration and appraisal activity in the surrounding area.
Andy Samuel, Chief Executive of the Oil & Gas Authority said: ”Maersk Oil and partners’ £3 billion investment to develop the Culzean discovery is excellent news for the UK during a period when the decline in global oil prices has created difficult operating conditions for this critical sector of our economy.”
The UK’s Chancellor of the Exchequer, George Osborne MP, said: “Today’s announcement sends a clear signal that the North Sea is open for business. Despite challenging times, this government has backed the oil and gas industry, introducing a vital package of support to help it to protect and create jobs.”
Contracts
In May last year, KBR was awarded a contract for front end engineering and design on Culzean. Hercules Offshore won a contract for a newbuild heavy duty jackup for development drilling on the field.
Ramboll Oil & Gas was picked for detailed design work on the Culzean project jackets. In October 2014, Heerema Hartlepool was awarded a contract for engineering, procurement and construction of the well head platform jacket, ready for sailaway in 2Q 2016.
Tenaris was awarded a five year contract to supply casing and related services for the development. In July 2014, Intecsea was awarded a subsea front end engineering and design contract for Culzean with options for detailed design.
Maersk Oil is operator with partners JX Nippon and BP.
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