BP to spend $2 billion in UK North Sea this year

BP has revealed its plans for spending $2 billion on its UK North Sea business in 2005.

BP has revealed its plans for spending $2 billion on its UK North Sea business in 2005.

The company intends to invest $780 million of capital into a range of projects and activities. In addition, $1.2 billion will be invested in operating, supporting, and maintaining its producing assets.

BP's total capital and operating investment in the UK North Sea over the next four years is expected to be over $7 billion.

An important element of the 2005 plan will be the operation of up to six mobile drilling rigs across the UK. BP will also begin a program of platform drilling on up to six of its assets in the UK and Norway.

BP's plans include development drilling for the Clair oilfield, west of Shetland, which is expected to come onstream in the next few weeks, and development of the highly complex Rhum field, the UK's largest undeveloped gas field, due to start-up late in 2005.

A major extension of the Magnus oilfield, east of Shetland, was also announced last October and sanction of development of the Farragon oil discovery in the central North Sea was announced in December.

In addition there will be a significant level of activity in producing fields. West of Shetland, BP plans to drill infill wells in the Schiehallion field, and new injection wells in the Foinaven field. Infill drilling in the Machar field is being planned, while on the Bruce gas field, a further phase of infill drilling will be progressed. Drilling will also continue in the southern North Sea and at Wytch Farm.

The company is in the process of tendering a range of major long-term supply contracts to support its North Sea operations. These contracts constitute approximately $400 million per year of the overall spend. They include contracts for well services, currently under tender; for subsea construction; inspection, repair, and maintenance, which will be awarded in the coming months; and for engineering, maintenance, and modifications services, which were awarded in June 2004 to Wood Group and KBR Production Services.

Commenting on the plans, Director and North Sea Business Unit Leader Dave Blackwood said, "This is an exciting program for 2005 and reflects our belief that, within a stable business and fiscal environment, the region has a bright future."

"These investments will help us to extend the life of many of our existing fields and bring new fields onstream to sustain healthy production levels for BP in the North Sea. They will also enable us to keep in place the infrastructure critical for future UK reserves development."

"By any measure, the North Sea is still a huge part of BP, and the region remains a major component of our future plans globally. The area is maturing, and this undoubtedly presents new challenges, but our activity and investment plans reflect our confidence in the remaining potential."

05/20/05

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