Aberdeen-based oil and gas firm Dana Petroleum said yesterday was ordering a new-build floating production vessel for its near-£1billion Western Isles North Sea development.
The contract for the project, due on stream in late 2015, is due to be given to Singapore-based Cosco later this year and is based on a design worked up by Sevan Marine for Dana.
The development, about 100 miles east of Shetland and 65% owned by Dana, is expected to support up to 200 jobs, including about 20 additional posts at the firm in Aberdeen.
It is expected to produce about 40,000 barrels of oil per day (boepd) – adding more than 26,000boepd to Dana’s UK production.
Paul Griffin, Dana’s UK managing director, said: “Western Isles is a very important project for Dana and a key part of our strategy to double daily production (for the group) to more than 100,000 barrels of oil equivalent by 2016.
“It is a small hub-type development at the moment based around two fields, but we also have other opportunities in the area; both within the field and slightly farther away.
“They are exploration prospects.
“This whole area is a very key area to Dana.”
The two fields in the development, Harris and Barra, previously known as Rinnes and Melville, are estimated to contain recoverable oil reserves of about 45million barrels.
Dana said the project would be a subsea development of at least five production and four water-injection wells, plus two exploration wells tied back to a circular floating production vessel with oil export using shuttle tankers. It hopes to get Department of Energy and Climate Change approval for the project by the end of this year and to start development drilling in early 2013.
Subsea installation would start in summer 2014 with the vessel installed the following year.
Mr Griffin said it was hoped there would be opportunities for the UK supply chain on the project, such as in subsea and drilling, with 50-75% of the overall £964million development cost potentially open to domestic firms.
Drilling on the project is to be carried out by Diamond Drilling.
The firm said it was likely to contract a dutyholder to run the installation and that a competitive tender process would be run.
The project is a joint venture with Dana the operator holding 65% interest, and Japanese exploration and production firm Cieco holding the remaining 35%.
Dana was bought by the Korean National Oil Company in 2010.
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