LONDON – EnQuest has UK government sanction for a £4-billion ($6.44-billion) investment in the 137-MMbbl heavy oil Kraken development, 125 km (77 mi) east of the Shetland Islands.
It is the largest new project investment in the UK North Sea so far this year. It will also provide EnQuest’s sixth production hub in the sector.
The project will develop two separate heavy oil fields, both of which will benefit from the government’s heavy oil allowances. Around 80% of the capex will be allocated to UK-based companies, EnQuest has pledged.
First oil is due in 2016-2017, with peak production set to exceed 50,000 b/d. The production vessel will be one of the largest to operate in the UK North Sea, EnQuest adds.
The field’s anticipated producing lifespan is 25 years, with average opex of $30/boe, including leasing costs for the FPSO. Use of a floater should make the ultimate decommissioning costs relatively low.
Partners in the development are Cairn Energy and First Oil.
Elsewhere in the sector, the UK Health & Safety Executive has approved the safety case for theEnQuest Producer FPSO, which will serve the Alma/Galia field redevelopment.
The 249-m (817-ft) long, 53,176-metric ton (58,616-ton) vessel, previously known as theUisge Gorm, has been moved to the OGN Group yard on the River Tyne, northeast England, for finishing and commissioning works. It will then sail to the field location.
Alma/Galia’s subsea infrastructure is now in place, with subsea trees and manifolds hooked up, pipelines and umbilicals in place, and risers and mooring systems pre-installed ahead of the arrival of the FPSO.
Drilling and completion operations continue with theStena Spey currently on the Alma location. The first ESP completion has been installed on well K2, with the second ESP completion installation under way on K3. The rig will then complete further drilling operations on K5, K6, and the top-hole section for the water injection/disposal well.
Once hookup offshore is completed, production will likely begin in mid-2014.
Last month, EnQuest agreed to acquire a 50% operated interest in theGreater Kittiwake area (GKA) assets in the UK central North Sea, close to its Scolty/Crathes discoveries and the Avalon prospect, giving the company an additional UK hub and adding 4.7 MMboe to its reserves.
Scolty and Crathes could be tied back to the Kittiwake platform, and there are infill drilling opportunities on the GKA fields. EnQuest is acquiring Centrica’s 100% interest in the Kittiwake to Forties oil export pipeline.
Finally, EnQuest says the Heather platform drilling rig activation project in the UK northern North Sea is expected to be completed soon, followed by the start of rig operations in December.