We have refreshed and refocused our portfolio; selling interests in assets that were no longer consistent with our strategy, investing in those that are, acquiring interest in new assets and bringing new fields into production.
Our portfolio today is smaller but stronger, with less operating complexity, reduced risk, and better potential to increase and sustain returns.
The multi-billion-pound Quad 204 project was designed to completely redevelop and maximise production from the Schiehallion and Loyal fields, located 175 kilometres west of Shetland. After 15 years of operating in harsh conditions and producing nearly 400 million barrels of oil, the original Schiehallion FPSO required replacement to enable continued production and recovery of a further estimated 450 million barrels from the fields.
From this, the Quad 204 project was born and has included construction of a new state-of-the-art FPSO, the Glen Lyon; renewal of much of the subsea infrastructure network; and a seven-year drilling campaign, comprising up to 20 new wells.
Glen Lyon will enable production from this key hub to be extended beyond 2035.
With an estimated eight billion barrels of oil in place, the Clair field is the largest oilfield on the UK Continental Shelf. The field, located 75 kilometres west of the Shetland Islands, was discovered in 1977, but challenging reservoir characteristics and the technological limits of the time meant it was the mid-1990s before the field saw extensive drilling and 2001 before BP and partners approved a development plan. Production from the Clair field began in 2005 – 28 years after discovery.
The physical size of the Clair field dictates development via a phased approach and Clair Ridge is the second phase of development. It has involved the construction and installation of two new bridge-linked platforms, the jackets (legs) of which were installed in 2013. Last year, the final topside modules were safely installed marking the completion of the construction phase. Hook-up and commissioning offshore is well under way as we gear up for first oil in 2018. Clair Ridge is expected to be producing beyond 2050. With our partners, we have also completed an appraisal drilling programme to help define a possible third phase of development of the Clair field.
The Foinaven field is located 190 kilometres west of Shetland in water depths of between 350 and 520 metres. The field was discovered in 1990 and sanctioned in 1994. It was the first deepwater development on the UKCS and the first west of Shetland. First oil from the field was in November 1997. The pioneering fast-track development was based on a network of subsea wells linked via a subsea network of pipelines, control umbilicals and risers to the Petrojarl Foinaven FPSO.
BP announced in January 2017 that it has signed an agreement to sell part of its interests in Magnus and associated pipeline infrastructure to EnQuest, who will take on operatorship of the platform, subject to relevant approvals. Magnus has been a great business for BP and a central part of our history in the North Sea. However, BP is a strong supporter of getting the right assets into the right hands and has for many years continuously refreshed our North Sea portfolio. EnQuest, with a proven business model for late life asset management, makes a natural future operator for Magnus.
Central North Sea
The Eastern Trough Area Project (ETAP) ranks as one of the largest and most commercially complex North Sea oil and gas developments of the past 20 years; nine different fields with varying ownership sharing a central processing facility (CPF). A multi-million-pound life extension project as part of the overall field development strategy got under way in 2015 and has breathed new life into this vital resource. We see significant potential and remaining field life in ETAP and, through our significant investments, expect it to produce into the 2030s.
The beginning of 2015 marked a major milestone in Andrew’s history with first oil from Kinnoull, a subsea tieback located 28 kilometres to the north of the Andrew platform. The Andrew Area Development (AAD) project was an excellent example of how we can extend the life of our existing assets. Extensive new subsea infrastructure, a new 750-tonne process module, and structural strengthening of Andrew have extended the productive life of the platform into the 2020s and provided a rejuvenated Central North Sea hub for future potential tiebacks, including the Arundel field which is due to be brought on stream in summer 2017.
Bruce was discovered in 1974 and still provides an important source of gas for the UK. Production commenced in the 1990s from two platforms, with a further platform added later. The high-pressure, high-temperature Rhum gas field, which is tied back to Bruce, was brought into production in 2005. The development of Rhum presented a unique set of challenges, namely dealing with the high reservoir pressures and temperatures and the length of subsea tie-back - 42 kilometres. A number of modifications were also required on the Bruce platform before production from Rhum could start. With the addition of Rhum, Bruce is expected to continue producing into the 2020s.
The Miller field was operational for 15 years, during which time it produced some 345 million barrels of oil. The field started up in June 1992 and, during the plateau years to 1997, output averaged at up to 150,000 barrels of oil and 225 million cubic feet of gas per day. Production ceased in July 2007. BP is now progressing a decommissioning programme for the platform and jacket (legs), which received UK Government approval in December 2013. Last year, BP awarded the engineer, prepare, remove, disposal contract for the Miller platform to London-based Saipem Limited who are expected to complete this work during 2017/18.
Forties Pipeline System (FPS)
FPS is an integrated oil and gas terminal, transportation and processing system serving the Central North Sea and currently transporting around 500,000 barrels a day. FPS is a key piece of UK oil and gas infrastructure, bringing a significant proportion of North Sea production to the mainland. BP announced in April 2017 that it has agreed to sell the Forties Pipeline System (FPS) business, with assets including the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities, to INEOS, subject to necessary approvals.
Sullom Voe Terminal (SVT)
In January, BP announced it has signed an agreement to sell part of its interests in SVT to EnQuest, who will take on operatorship of the terminal, subject to relevant approvals. EnQuest is already a SVT owner as well as owner/operator of a number of East of Shetland fields so has a strong interest in prolonging the operating life of this key asset. The Shetland region will remain a significant part of BP’s North Sea future. Oil production from the Clair field continues to be exported through SVT and the Clair Ridge development will also export to the terminal when it comes on-stream. In addition, gas from BP’s west of Shetland Schiehallion, Foinaven and Clair fields, continues to be processed through the terminal.
Operated by others
The Maersk-operated Culzean field (BP ownership share 32%) is one of the largest new projects to be sanctioned in the North Sea in recent years and is expected to supply around 5% of UK gas requirements. The field is a high-pressure, high-temperature gas condensate reservoir which was sanctioned in 2015. First gas is anticipated in 2019. The field will be developed with three fixed platforms and a floating storage unit. Construction is well under way and a new-build drilling rig is currently on field drilling the first development wells.
The Shell-operated Shearwater field (BP ownership share 28%) is a high-pressure, high-temperature gas condensate field located in the Central North Sea. Shearwater was brought online in 2000 and has been developed through two fixed platforms. Shearwater remains among the biggest producing fields in the North Sea and is anticipated to continue operating into the 2020s.