Oil and gas firm EnQuest said today it had agreed to go ahead with a £546million project to jointly develop its central North Sea Alma and Galia fields.
The combined development – EnQuest’s largest new project to date – is expected to produce 20,000 barrels of oil equivalent (boe) per day at peak, about half of the firm’s increased estimated production of 40,000 boe per day in 2014.
It will also see what was the first North Sea field to go into production – Argyll, now known as Alma – revived for a second time.
EnQuest also announced success on its 40%-owned and operated Crathes exploration well, also in the central North Sea, with a 52ft light oil column.
This is to be drilled deeper to the Moon prospect and results used to assess the commerciality of the Scolty, Crathes/Moon and Torphins area, EnQuest said.
In a third announcement, the firm revealed details of a farm-in on Talisman’s Kildrummy discovery – estimated to contain 40million barrels of oil. EnQuest will also become operator, subject to approval, with a 40% interest.
Chief operations officer Nigel Hares said: “I think this is an important announcement for us and a good demonstration of EnQuest’s strategy. It is also a good day for the UK sector.”
He said the UK North Sea tax raid by Chancellor George Osborne in the March Budget had been “very disappointing” and made the investment decision on Alma/Galia, the firm’s fourth hub, “more challenging”.
Mr Hares added: “Without a shadow of a doubt investment will reduce in one to two years time.”
Despite this the firm is still looking at options for further future hub projects, including potentially at Crathes and Kildrummy.
The Alma/Galia project, which EnQuest said would add 29million boe to its reserves, is awaiting approval from the Department of Energy and Climate Change.
EnQuest chief executive Amjad Bseisu said development of Alma/Galia, abandoned in 1992 after being discovered in 1971 and then producing again as the Ardmore field from 2003 to 2005, had been aided by new technology.
Its development will be through seven production and two water injection wells tied back to the modified Uisge Gorm floating production vessel, which was used on the Fergus, Fife and Perth fields but has been sat idle in Rotterdam.
First oil is expected in the fourth quarter of 2013, with peak production of more than 20,000 boe expected.
In an update on future production, EnQuest said it was anticipating average daily production of 20,000-24,000 boe in 2012, 25,0000-30,000 boe in 2013 and more than 40,000 boe in 2014.