By Phaedra Friend Troy
BP (NYSE:BP) and its partners have decided to redevelop the Schiehallion and Loyal oil fields in the UK Mid Atlantic west of the Shetland Islands to maximize oil recovery from the fields.
Achieving first oil in July 1998, the Schiehallion and Loyal oil fields have produced almost 400 million barrels of oil, but an estimated 450 million barrels of recoverable resources remain.
The £3 billion (US $4.8 billion) redevelopment of the oil fields West of Shetland will extend production to 2035 -- or possibly beyond.
Known as a Quad 204 project, the redevelopment calls for replacing the existing Schiehallion Floating Production Storage and Offloading (FPSO) vessel with a new FPSO, scheduled for installation in 2015.
In March 2011, BP signed a US $1.2 billion contract with Hyundai Heavy Industries for the construction of an FPSO for the redevelopment. Measuring 270 meters long and 52 meters wide, the new FPSO will be able to process and export up to 130,000 barrels of oil a day, as well as store more than 1 million barrels of oil.
Additionally, the subsea facilities will be replaced with upgraded equipment to enable the full development of the reservoir, and up to 25 new infill wells will be drilled. The new subsea facilities are scheduled to start production in 2016.
"This important milestone is consistent with BP's strategy to sustain a material, high quality business in the North Sea region," said Trevor Garlick, regional president of BP's North Sea business. "The Schiehallion and Loyal oil fields are established assets with a strong future - and we and our co-venturers are taking some significant steps to maximize the greater potential we now see in these fields."
BP will hold a 36.3 percent ownership in the new FPSO. Project partners will be Shell with 36.3 percent, Hess with 12.9 percent, Statoil with 4.84 percent, OMV with 4.84 percent and Murphy Petroleum with 4.84 percent.
"We are committed to growing and maintaining a material, high quality business there for the long term," said BP's Group Chief Executive Bob Dudley. "We are pursuing a number of additional growth opportunities to support this strategy. For us a key to this strategy is the need to maintain the integrity of our existing infrastructure; to look after our reservoirs and maximise recovery; and to deploy and develop the necessary capability."
Initial Schiehallion and Loyal Development
Schiehallion was discovered in the fall of 1993 when the Ocean Valiant semisubmersible drilled discovery well 204/20-1. Situated in waters measuring 375 meters deep, the Schiehallion oil field is located on UK Blocks 204/20, 204/25a, 204/25b, 205/16 and 205/21b.
Overlying the main field, the Loyal oil field is situated on UK Block 204/20.
The initial developed aimed to produce some 340 million barrels from Schiehallion and another 85 million barrels of oil from Loyal.
The oil fields were developed by 29 subsea wells in four drilling centers, producing oil to manifolds that are then connected by steel pipes, and then flexible risers which then transfer production to the FPSO on the water's surface. Subsea design, fabrication and installation was performed by Kvaerner/Aker/Subsea Offshore.
The current Schiehallion FPSO is capable of processing 1540,000 barrels of oil a day and storing more than 900,000 barrels of oil. Brown and Root performed the design, engineering and procurement for the FPSO, while Harland and Wolff constructed the vessel.
BP launches $4.8B redevelopment of Schiehallion, Loyal oil fields West of Shetland
By Phaedra Friend Troy