Rystad Energy: 13 UK fields to be sanctioned in 2018
The UK oil and gas industry is coming back to life with 13 fields expected to be sanctioned in 2018, according to research from intelligence group Rystad Energy.
Rystad said on Tuesday that the projected 13 fields were a rise in comparison to only four UK fields gaining approval during the past two years.
The latest example, and potentially the second largest of the UK fields projected to reach a final investment decision (FID) this year, is Shell’s announcement of an FID on the Penguins redevelopment project featuring recoverable reserves of just under 100 million barrels of oil equivalent. The development plan involves an upgraded FPSO designed to handle a peak production of 45,000 boe/d.
Another UK project that appears to have received an FID, according to Rystad, possibly even before Shell’s move on Penguins, is Decipher Energy’s Orlando field, where Diamond Offshore has been selected to drill a development well this year.
Rystad added that the remaining 11 forecasted FID projects in the UK this year were operated by both minors or majors, and will use a variety of development solutions.
Readul Islam, Rystad Energy research analyst, said: “Floaters, subsea tiebacks, and platforms to serve projects large and small means there will be something for everyone.”
Another operator lining up to launch an FPSO project this year is Alpha Petroleum with its Cheviot field development. The company chose the Teekay’s idle Varg floater to modify for the project. The Cheviot project is just the second UK FPSO expected to reach FID since 2016.
According to the intelligence group, Independent Oil & Gas hopes to hand out a series of platforms to develop several gas fields while Nexen/CNOOC continues to plot the next phase at the massive Buzzard field.
The timeline of some of these FIDs could change. Rystad said that BP, for instance, was expected to start up its Clair Ridge field early this year – but after kicking off such a large scheme, the company might not rush with the extension called Clair South, even though it has government consent to proceed.
Rystad believes that some early 2019 FID candidates could slide forward into 2018 with some hard work and a little luck. Siccar Point Energy pulling the trigger a few months earlier than expected would mean another FPSO project in 2018 for its Cambo project.
“It remains to be seen exactly how many UK projects end up securing FIDs this year, but there is no denying the positive trajectory for the sector. Whereas the four UK projects that received FIDs in 2016 and 2017 represented some 123 million boe of reserves […], the 13 FIDs projected by Rystad Energy in 2018 represents about 550 million boe,” Rystad added.
“The trend is unambiguous. The UK industry has reason to smile after a couple of gloomy years,” said Islam.