HPHT Jackdaw being 'redefined'

Oct 30, 2014

BG Group has said it is delaying a sanction decision on its high-pressure high-temperature (HPHT) Jackdaw project in the central North Sea.

The firm said the group wanted to study more economic and lower risk development solutions for the field, including a potential tie-back to third-party infrastructure.

Image: Jackdaw is close to the Judy and Jasmine fields in the central North Sea. Image from BG Group.

Sami Iskander, BG Gorup's COO, said, in a discussion with analysts yesterday: "There are discussions [with the UK Treasury] around the type of allowances, further allowances, that HPHT fields like Jackdaw could benefit from and that’s a discussion. There’s also discussion among the partnership about the best potential development, should Jackdaw be a total standalone project or benefit from other infrastructure within the J block where there is some others. So really where we’re moving to is a redefinition, a delay yes, but a delay that may benefit from potential fiscal benefits, but also a redefinition of the project.

"It’s a high cost project, a high temperature high pressure project that could benefit from existing infrastructure, so redefining as a phased development as opposed to a standalone development."

BG Group’s Jackdaw discovery, in central North Sea Blocks 30/2a (BG Group 44.1%), 30/2d (35%) and 30/3a (30.5%), contains 125-250MMboe and a wider development taking in other fields in the area could unlock 0.5billion boe, BG Group’s managing director, Europe E&P, Andy Samuel, told Oil & Gas UK’s HPHT breakfast briefing in Aberdeen early June. This would amount to 10% of the UK’s domestic gas consumption needs.

Jackdaw is also an extreme field, with 17,250psi reservoir pressure and temperatures at 385°F at its base, making it the highest pressure field found to date on the UK Continental Shelf.

It is new territory. BG Group had to qualify new equipment to carry out a 2012 drill stem test on Jackdaw. Giving an example of the technology that will be required to develop the field, Samuel said BG has been assessing a high integrity pressure protection system (HIPPS), involving numerous fast-closing ball valves, weighing well over 10-tonne each, on the development’s well head platform.

Jackdaw was discovered in 2005. BG has since run a four-well, £450 million appraisal program, from 2007-2012. The discovery extends across three licenses, with lean gas-condensate in high permeability Jurassic reservoir, similar to Total E&P UK’s Elgin Franklin development.

Samuel says BG has been through concept select on Jackdaw, with a three-platform base case concept, “remarkably similar” to a development concept chosen by Maersk Oil North Sea for its Culzean HPHT development, also in the central North Sea.

But, costs are crucial on Jackdaw and it is taking longer than BG Group had envisaged to make its economics stack up. The firm is assessing the potential for Jackdaw to be part of a larger cluster development, taking in other nearby fields and prospects, operated by BG as well as other operators, primarily GDF Suez E&P, but also Maersk, to make it and other projects it work.