On behalf of its co-venturers BP announced Wednesday an agreement to progress a major re-development of the Schiehallion and Loyal oil fields to the west of the Shetland Islands.
Schiehallion and Loyal have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available. The investment of circa £3 billion in the re-development of the fields will take production out to 2035 and possibly beyond.
Trevor Garlick, Regional President for BP’s North Sea business, said: “This important milestone is consistent with BP’s strategy to sustain a material, high quality business in the North Sea region. The Schiehallion and Loyal oil fields are established assets with a strong future – and we and our co-venturers are taking some significant steps to maximise the greater potential we now see in these fields.”
BP has developed a strong track record west of Shetland over the past two decades and will use the latest technology to maximise recovery from these fields.
The Quad 204 project involves replacing the existing Schiehallion Floating, Production, Storage and Offloading (FPSO) vessel with a new FPSO which is scheduled to be installed in 2015. The new vessel will be 270 metres long by 52 metres wide and able to process and export up to 130,000 barrels a day of oil, and store in excess of 1 million barrels.
There will also be a major investment in the upgrading and replacement of the subsea facilities to enable the full development of the reserves.
The new facilities are scheduled to commence production in 2016.
BP will have a 36.3 per cent ownership interest in the new FPSO, with other interests as follows: Shell (36.3 per cent); Hess Ltd (12.90 per cent); Statoil (UK) Ltd (4.84 per cent); OMV (UK) Ltd. (4.84 per cent) and Murphy Petroleum (4.84 per cent).
Commenting on the news, Bob Dudley, group chief executive of BP, said, “This decision is another example of BP’s strategy to deliver long-term value growth through investing in the large fields and in key basins where it has extensive knowledge. BP has over 40 years experience in the North Sea, during which time it has developed a strong set of assets. We are committed to growing and maintaining a material, high quality business there for the long term. We are pursuing a number of additional growth opportunities to support this strategy. For us a key to this strategy is the need to maintain the integrity of our existing infrastructure; to look after our reservoirs and maximise recovery; and to deploy and develop the necessary capability.”