Brownfield allowance secures more development of Ninian in North Sea

Offshore staff

CALGARY, Canada – Canadian Natural Resources has approval from Britain’s government on three brownfield allowances (BFAs) in the northern UK North Sea.

BFAs, first announced in 2012, provide a property development allowance on qualifying pre-approved field developments. This mitigates the impact of previous supplementary income tax increases.

One BFA on Canadian Natural’s Tiffany field resulted in a two-well infill drilling program that delivered first oil in May 2013.

Another BFA, for the Ninian field, concerned a development plan comprising four new production wells, four injectors, and two well upgrades. The program started in 4Q 2013.

In 4Q 2011, the Banff/Kyle FPSO incurred damage following a storm and removed from the field for repair. Currently the vessel is undergoing repairs and CNR expects it to return to the field this summer, followed by a resumption of oil production.

The company started decommissioning of the Murchison platform in 4Q 2013 and expects the program to continue for about five years.

In October, the company entered into a Decommissioning Relief Deed with the UK government. This is a contractual mechanism under which the government guarantees its participation in future field abandonments through a recovery of petroleum-related tax and corporate income tax.


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