Nexen planning new, incremental North Sea developments

Nexen claims its 2009 global exploration program was among its most successful, leading to numerous substantial discoveries.

Offshore staff

CALGARY, Alberta -- Nexen claims its 2009 global exploration program was among its most successful, leading to numerous substantial discoveries. This year’s campaign will feature several exploration and appraisal wells in the North Sea. Targets including a high-impact prospect west of Shetlands and a potential extension of the Buzzard field.

Last year the company invested $697 million in North Sea E&P. In the emerging Golden Eagle area in the central UK North Sea, where its operated discoveries include the Golden Eagle, Pink, and Hobby fields, Nexen estimates gross contingent recoverable resource of 150 MMboe or greater. It is working on a development based on standalone facilities.

At Buzzard, last year’s outlay was $232 million of which $104 million was directed at construction of a fourth H2S treatment platform, and the remainder to ongoing development drilling. During the final quarter of 2009, the field was delivering 200,000 boe/d, and it should produce at plateau rates in 2010.

Earlier this week, Nexen identified an issue requiring repair to the separator unit on one of the existing platforms. While the cause is under investigation, output has been reduced temporarily to 30-50,000 boe/d. Preliminary findings indicate that Buzzard will be operating at these reduced rates for the next few weeks.

There is a possibility that start-up of the fourth platform, currently scheduled for 2011, could be advanced to this year, although this would only occur if the wells started producing higher than expected levels of H2S. However, the downtime arising from this action could reduce annual volumes by 10-15,000 boe/d.

Elsewhere in the central UK sector, Nexen’s Ettrick development came onstream this past year and should ramp up to around 20,000 boe/d during 2010. An appraisal well is likely to be drilled later this year on the nearby Blackbird discovery, which could lead to a tieback to the Ettrick FPSO.

At Scott/Telford, the company has added 12 MMboe of proved reserves due mainly to successful development drilling at the Telford satellite, allowing it to almost double production through the Scott platform. Nexen is looking at the opportunities for quick tiebacks and additional drilling in 2010.

02/18/2010

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