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Hans J Marter
4 March, 2010
OIL GIANT BP yesterday (Wednesday) re-affirmed its
commitment to the west of Shetland oil province with
billions of pounds of investments in the pipeline for the
next five years.
Both, the Clair Ridge development (phase two of the Clair
oil field) and the project to secure the long term future of
Schiehallion (Q204 in oil industry jargon) will go ahead as
of 2015, with crucial investment decisions being taken in
2011 and 2012.
The commitment will help to secure the long term future of
the Sullom Voe oil terminal, which provides hundreds of jobs
to the local community.
However Shetland Islands Council’s harbour board chairman
Alastair Cooper said it was not clear if Schiehallion oil
would continue to boost oil throughput at Sullom Voe.
On Tuesday, BP hosted a meeting with potential investors in
London and gave a strategy update to the financial
community.
Yesterday (Wednesday) a spokesman for BP in Aberdeen gave
further details saying that the life of Schiehallion could
extend beyond 2035, while the Clair Ridge development had a
40 year life design.
The spokesman said phase two of the Clair development, with
an estimated production of 120,000 barrels a day until at
least 2055, would be “significant larger” than the present
operation.
Phase one started production in March 2005 when the first
oil was pumped into Sullom Voe via a large new pipeline.
Further work on Schiehallion, 110 miles to the west of
Shetland, will open up between 150 million and 250 million
barrels of oil.
The spokesman said: “We are looking at different design
options, including a brand new floating vessel. If we were
to sustain |
oil production at
Schiehallion in the long term we would have to do something
differently towards what we currently have.
“Schiehallion has been producing since 1998, but our long
term plans are for more production and for a longer period.
“We are looking at three or four options of how to do that,
and we are currently targeting the first quarter of next
year for the project to be sanctioned.”
He added: “The plan for Clair Ridge is a bridge linked twin
steel jacket development with the drilling and production
facilities on one platform and the quarters and utilities on
the other.
“The estimated capital cost is going to be $6 billion gross
(£4 billion). This is really a big project and that is why
it was in the strategy presentation.”
Mr Cooper said the update from BP was good news on the one
hand but also posed a challenge as it was unclear whether
oil from Schiehallion would continue to be taken to the
terminal by the shuttle tanker Loch Rannoch.
“The original deal with Clair was to deliver it in three
phases. We have to be thankful to the tax concession the
government gave to the oil industry, as I think it has
brought forward the Clair phase two.
“It helps guarantee continuity at the Sullom Voe oil
terminal. When the development of Clair was agreed the
assumption was that all three phases of Clair would come to
Sullom Voe, and I believe that is still the case.”
He added: “Schiehallion may not be so good news, because I
suspect BP will be looking at a larger vessel that has the
capacity to store sufficient oil to take it directly to the
European market, as it is being done with Foinaven.
“The challenge for us and the Sullom Voe terminal is to
offer a low enough unit cost for harbour operations to
ensure Schiehallion keeps coming into the port of Sullom
Voe.”
A spokesperson for Sullom Voe welcomed BP’s commitment but
said it was too early to say that oil from Clair 2 would be
pumped to the terminal.
She added the terminal would position itself in a bid to win
some of the future business.
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