Huntington partners set to charter FPSO

Sevan Marine has signed a letter of intent to transfer the FPSO Sevan Voyageur to the Huntington oil field development in UK central North Sea block 22/14.

Offshore staff

ARENDAL, Norway -- Sevan Marine has signed a letter of intent to transfer the FPSO Sevan Voyageur to the Huntington oil field development in UK central North Sea block 22/14.

The cylindrical floater is due to be decommissioned from its current UK location on the Shelley field in July. Shelley is operated by Premier Oil, also one of the partners in the Huntington project.

According to Sevan, the proposed charter will be for a fixed term of five years with optional extensions, with an estimated contract value for the fixed term of $535 million.

In the meantime, negotiations will continue on a mutually exclusive basis through June 30. Sevan points out that certain technical and financing conditions remain to be satisfied during this period.

According to Stavanger-based Noreco, a partner in the development, the FPSO concept allows for an early production start, and will add flexibility to attempts to optimize production and to access further resources from the field’s deeper reservoirs.

The first development phase will cover Huntington’ Forties reservoir which was discovered and delineated in 2007. Noreco estimates recoverable reserves for the first five years of production at 41 MMboe, of which 90 % would be oil.

The partners plan to drill three to four production wells and one to two water injectors. The FPSO will have an oil production capacity of 30,000 b/yr. Oil will be stored onboard in tanks before being offloaded to shuttle tankers, while produced gas will be exported via a subsea pipeline. Assuming early availability of the Sevan unit, first oil should be feasible late in 2011.

Huntington also contains what Noreco terms a “significant” discovery in the deeper Fulmar formation, which requires further appraisal prior to a development decision. But reserves here too could be produced via the FPSO.

The field is in UK license P1114. E.ON Ruhrgas UK E&P is operator, with a 25% interest, in partnership with Noreco (20%), Premier (40%), and Carrizo Oil & Gas (15%).

In a seprate development, Sevan has secured commitments for a $525 million senior debt project finance facility for its Sevan Driller II vessel, with ING Bank as Mandated Lead Arranger. The vessel is contracted for a six-year fixed term to Petrobras, and is due to be delivered from the Cosco Nantong Shipyard in China early in 2012.


05/03/2010

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