BP spreads its funds

BP has announced plans to invest $2 billion in various UK North Sea projects this year and expects to commit over $7 billion in capital and operating expenditure in the region during the next four years. Much of this year's funds will be taken up contracting around six mobile drilling rigs.

The development drilling program includes work on:
• The Clair oilfield west of the Shetlands, due onstream in the next few weeks, around four months behind schedule
• Rhum, the UK's largest undeveloped gas field (800 bcf recoverable), which should begin producing late this year
• An extension of the Magnus oil field, east of the Shetlands
• The Farragon subsea development, hosted by BP's Andrew platform.

Money will also be allocated to drilling of infill wells in the Schiehallion, Machar, and Bruce fields and to new injection wells on Foinaven. Further work is planned in the southern North Sea and at Wytch Farm onshore/offshore southwest England. BP adds that it is tendering a range of long-term supply contracts to support its North Sea operations, with an overall value estimated at $400 m. These include well service, subsea construction, inspection, repair and maintenance, and engineering and modification services. Wood Group and KBR won the engineering and modification services contract in June 2004.

Concurrent with BP's news, Subsea 7 announced that it had clinched $12 million of work for the Schiehallion infill and Foinaven water injection pipelay projects west of the Shetlands. Work is already underway, and includes engineering, procurement, transportation, installation, and testing of two 10-in. production and water injection pipelines, the lead vessel being the Skandi Navica.

1/24/05