BP, Shell pour first oil from Schiehallion Area in North Sea
BP announced the start of production on behalf of its partners, Royal Dutch Shell PLC and Siccar Point Energy.
BP shares were up 0.5% on Monday at 474.65 pence, while Shell 'A' shares were up 0.4% at 2,126.50p, and 'B' shares were up 0.4% at 2,173.00p.
Schiehallion and the adjacent Loyal fields were first developed in the mid-1990s and have produced nearly 400 million barrels of oil since production started in 1998. With the fields' redevelopment through the Quad 204 project, BP, Shell and Siccar expect to unlock a further estimated 450 million barrels of resources, extending the life of the fields out to 2035 and beyond.
"Production from the project is expected to ramp up through the remainder of 2017 to a plateau level of 130,000 barrels of oil per day," BP said.
The project has included the construction and installation of the "world's largest harsh water" floating, production, storage and offloading vessel - the 'Glen Lyon' - a major upgrade and replacement of subsea facilities, and a continuous drilling programme of up to 20 new wells to enable the full development of the reserves.
For BP specifically, the company said it is aiming to double its UK North Sea production to 200,000 barrels of oil equivalent a day by 2020, and sustain a material business in the region for several decades.
"Production from the new Clair Ridge major project is expected next year. Over the next 18 months, BP plans to participate in up to five exploration wells in the UK, in addition to drilling approximately 50 development wells over the next three to four years," said BP.
Quad 204 is the third of seven Upstream major projects BP expects to bring online in 2017, following the earlier start-ups of the Trinidad onshore compression project and the Taurus/Libra development of the West Nile Delta project in Egypt.
"New projects starting up through 2016 and 2017 are expected to deliver 500,000 barrels of oil equivalent per day net new production capacity for BP by the end of this year. With further projects beginning production through to the end of the decade, BP expects approximately 800,000barrels of oil equivalent per day production from new projects by 2020," BP said.
Breaking down the ownership of the project, BP operates the FPSO with a 36% stake alongside Shell's 54% and Siccar's 10%. The Schiehallion is owned 33% by BP, 55% by Shell, and 12% by Siccar while the Loyal field is half owned by BP and half owned by Shell. ■