Premier Oil has confirmed the five-years-with-options contract for the Sevan Voyageur floating production and storage unit on its UK North Sea Huntingdon oil development.
Huntingdon, one of a number of discoveries made in 2007 by now defunct Oilexco, is one of three projects at the core of Premier’s drive to raise production from the 44,000 barrels per day 2010 target to 75,000bpd by 2012.
The front-end engineering and design study was carried out by engineering house Xodus of Aberdeen, the floating production unit is confirmed, albeit later than scheduled, which leaves the way for finalising the development drilling contract with Ensco and getting the subsea side of the project to tender.
“Sevan Voyageur has now finished on Shelley and has been moved off,” said Nigel Wilson, Premier’s North Sea business unit manager.
“It’s being prepared for upgrade and needs to have gas compression and water injection facilities fitted.
“Production capacity will be in the order of 35,000-40,000 barrels per day, once the modifications have been completed.
“It’s an $80million upgrade, so quite significant. That will take place during H1 2011.”
The production unit is owned by Norwegian company Sevan Marine, which Premier helped to keep afloat during the difficult days flowing Oilexco’s demise. Part of the problem was that the Shelley field was a lot smaller than Oilexco had led the market to believe.
Pending signing of the Sevan Voyageur contract, the companies have been pushing ahead based on a letter of intent issued by Premier.
Wilson said: “We also have to go out and drill five wells . . . three producers and two injectors.
“The rig contract should be signed very shortly. Discussions are under way with Ensco.
A significant number of exploration/appraisal wells were drilled on Huntingdon when Oilexco controlled the asset. However none will be used in the development.
The subsea aspect of Huntingdon has yet to be tendered.
Wilson indicated that most of the development costs were linked to hiring the production unit.
“Overall, our Capex commitment net to Premier is some $80million, so that means the cost of developing Huntingdon will be around $200million.
First oil is expected in Q4 2011. The first phase of the project covers the Forties reservoir which was discovered and delineated in 2007. In addition to the Forties, there has also been a significant discovery in the deeper Fulmar field, which requires to be fully appraised before further development can be undertaken.
According to Noreco the estimate for recoverable reserves for the first five years of production is 41million barrels oil equivalent of which 90% is oil.
Huntington partners comprise: E.ON Ruhrgas (operator) with a 25% interest, Noreco (20%), Premier (40%) and Carrizo Oil & Gas (15%).