North Sea Kraken offshore oilfield partners talk to FPSO suppliers

Offshore staff

LONDON – Nautical Petroleum (AIM:NPE) is processing and interpreting new 3D seismic collected over the heavy oil Kraken field in the northern UK North Sea, ahead of a planned development.

The company says the accumulation extends over an area of 43 sq km (16.6 sq mi). Nautical has applied advanced seismic inversion techniques to understand the distribution of the reservoir. Six well penetrations support findings of this model, suggesting that the Tertiary, Heimdal Unit III, sandstones form a continuous, high-porosity reservoir.

In January 2012, Nautical agreed to sell a 25% interest in Kraken to EnQuest in return for a carry on future expenditure of up to $240 million. The final amount will depend on a determination during the development of whether 2P oil reserves in field blocks 9/2b and 9/2c equal or exceed 166 MMbbl.

Nautical says FPSO suppliers indicate they are prepared to provide vessels on advantageous terms to meet the preferred development option.  The partners will negotiate to secure a vessel for a phased development of Kraken, with horizontal development wells drilled from two drill centers and subsea tiebacks to the FPSO. 

A field development plan will be submitted this year, leading to first oil in 2015.

The 3D seismic survey over Kraken also extended to block 9/1a containing the western extension of the promising Ketos discovery. Nautical has a 100% interest in this block, although EnQuest has an option to acquire 45% by paying up to 90% of the costs of a firm appraisal well and a further contingent well.  Drilling could start toward year-end.

Elsewhere in the UK’s heavy oil corridor, Nautical is a partner in the much larger Mariner field. Statoil is aiming to submit a development plan this fall.

The development concept is a single rig, 50-slot platform with a ship-shaped floating storage unit.  First oil could flow in late 2016, with production continuing potentially well into the second half of the century.

However, because of the project’s large scale, Nautical has opted to reduce its exposure to Mariner, and has so far received interest from companies in Europe and the Far East.

Nautical is also a partner in the Premier-operated Catcher oil field in the UK central sector, where reserves are closer in size to Kraken’s. Oil has been proven in the Cromarty and Tay reservoirs in Catcher, and the nearby Varadero and Burgman structures.

Although the reservoirs are shallow, Nautical say oil quality is consistently good, ranging from 31° API at Catcher to 26° API at Varadero and 24° API at Burgman, all with viscosities less than 10 cp.  All three discoveries exhibit good-quality reservoirs, with porosities more than 30% and multi-Darcy permeability, which should lead to high-productivity development wells.

The Tertiary reservoirs show up on seismic as strong amplitudes, with the colored inversion seismic signal indicating oil-bearing sands at the well penetrations.  Analysis continues to correlate and quantify these amplitudes with net oil pay to firm up in-place resource estimates.

New high density seismic has been acquired which should help reduce uncertainty over reservoir net pay and assist definition of remaining prospectivity on the block, which Nautical believes holds significant upside.

Drilling will resume this spring with a well on the Carnaby prospect, west of Burgman.  A further well may follow on the Bonneville prospect, which could be a southeastern extension of Burgman. Other candidates on the block, Rapide, Cougar, and Rocket, will be drilled before 2015.

Concept screening studies are under way for a development, including platform versus FPSO; subsea wells versus wellhead platforms; and oil and gas export routes. The partners expect to make their choice by mid-year and submit a field development plan before year-end, leading to first oil in 2015.

3/21/2012

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