Island weighs up options for Celtic Sea fields

Island Oil & Gas is aiming to issue an initial development plan for its Old Head of Kinsale and Schull gas fields in the Celtic Sea off southern Ireland.

Offshore staff

DUBLIN --Island Oil & Gas is aiming to issue an initial development plan for its Old Head of Kinsale and Schull gas fields in the Celtic Sea off southern Ireland. But the outcome may depend on Star Energy Group's plans for the Kinsale offshore production complex.

Star, a wholly owned subsidiary of Petronas, has just acquired the Kinsale field and platform facilities from Marathon Ireland. Island had proposed subsea tiebacks for Old Head and Schull, but Star's strategic focus is known to be gas storage. In light of this, Ireland's Petroleum Affairs Division has extended the current phase of the Old Head and Schull exploration licenses through Oct. 31.

From Island's standpoint, a tieback would depend on securing commercially viable terms with Star. Alternatively, the company may opt for a gas storage conversion scheme of its own on either or both of these fields. This follows an upward revision of gas-in-place estimates based on interpretation of 825 km (512 mi) of new seismic acquired last year and new reservoir modelling and engineering studies.

Conversion could occur relatively early in field life -- Island has discussed potential storage/sale arrangements with the regulatory authorities and various interested parties.

Star is also the new operator of Seven Heads, an existing subsea satellite to Kinsale. Estimates of gas in place have recently been upgraded: according to Island, the increase is thought to derive mainly from thin-bedded sands which provide secondary support to recharge the productive higher permeability sands at a low rate. This could have a bearing on the ability of the reservoirs to hold cushion gas for future gas storage operations.

Island, a partner in Seven Heads, believes there are further pockets of accessible gas in unperforated gas sands, which could further extend the life of both the field and the Kinsale facilities.

04/27/2009

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