Drilling at BP’s delayed North Uist exploration well has found gas condensate, it emerged yesterday.
But project partner Faroe Petroleum said the reservoir still fell short of expectations, and its shares fell more than 2% at 138p.
The well 76 miles north-west of Shetland ran into technical difficulties last year, with delays of over three months making it potentially the most costly UK well to date, with spending estimated at £100million-plus.
Graham Stewart, chief executive of Faroe Petroleum, said: “After a long period of drilling activity on this wildcat exploration well, we are pleased to have made a discovery in the North Uist exploration well, although we had, however, hoped for better quality reservoir.”
The commercial potential of the discovery has yet to be evaluated and, despite the disappointing initial result, Mr Stewart said proof of another working hydrocarbon system in the frontier west of Shetland was good news.
Faroe added that the well had also found traces of hydrocarbons in the shallower Cardhu prospect.
Drilling by the Stena Carron drillship, started on March 25 last year.
A spokesman for BP said: “The well was drilled to a total vertical depth of over 4,700 metres (15,419ft) and a succession of gas-condensate bearing sandstones was encountered. The geological data collected in the well will be subject to detailed evaluation in the coming months.”
Andrew Reid, managing director of energy analyst Douglas-Westwood, said: “The suggestion is that the flow characteristics of the reservoir may be challenging and further analysis is required to fully determine the recoverable reserves.
“This isn’t too uncommon, as many west-of-Shetland fields are not straightforward to develop technically.”
Brian Nottage, a consultant at analyst Hannon Westwood, said: “It is encouraging that hydrocarbons have been found and that other potentially commercial accumulations exist in the area.”
While some companies have failed west of Shetland – in 2008 and 2009 Shell drilled two wells on the South Uist prospect and failed to make commercial discoveries – others have had success.
Chevron is working up development plans for its nearby Rosebank discovery and Total is building infrastructure for the Laggan-Tormore find, including a new gas plant in Shetland and pipeline others will be able to access.
North Uist partners are: BP with 47.5%, Nexen 35%, Faroe 6.25%, Cieco Exploration and Production (UK) 6.25% and Idemitsu Petroleum UK 5%.
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