North Sea independent Fairfield Energy has signed-up Taqa Bratani to help it develop what has been described as one of the biggest recent developments in the North Sea.
The Darwin development, part of the field previously known as North West Hutton before it was dropped by oil giant BP, is estimated to contain 500million barrels of oil in place, unrisked.
The deal, announced today, would see Taqa Bratani, a subsidiary of semi-state owned Abu Dhabi National Energy Company (Taqa), acquire 50% interest in three licences, containing Darwin and other prospective exploration acreage south of it.
This would be in return for Taqa carrying out work on the licences, some 80 miles north-east of the Shetland Islands and about nine miles from Taqa’s North Cormorant platform.
It would also make a cash payment – for an undisclosed figure – to Fairfield, which is backed by private investors.
Ian Sharp, chief operating officer at Fairfield, said: “This is a significant announcement for us. Darwin is a jewel in our crown, you could say.
“This is not just small pockets of oil, this is a substantial extension to what was North West Hutton.”
Mr Sharp also said the firm, which cancelled a stock market listing bid in 2010, was in advanced talks over further funding with existing investors and additional funding with a new investor.
He said every one of the firm’s assets, in the northern, central and southern sectors, had moved forward last year, excluding the “non-core” Staffa, which had been sold.
On Darwin, Mr Sharp said Fairfield plans to drill two, possibly three, exploration/appraisal wells this year using the semi-submersible drilling rig Ocean Nomad and, depending on the outcome of those, two more the following year.
This would lead into a development plan which could see first oil by 2017 or 2018, he said.
Development options have previously focused on subsea tie-backs to the Fairfield-operated Dunlin platform, about 15 miles away, but other options, such as a floating production vessel or a fixed platform, have been looked at, with first oil anticipated in 2017.
Brian Nottage, Aberdeen consultant at analyst Hannon Westwood said: “We see this as a good deal. Taqa is looking to see how they can maximise their position in the area and it is a good move for Fairfield as well because it gives them an aligned partner. And there could be substantial upside in this.”
North West Hutton was discovered in April 1975 by Amoco (UK), later bought by BP.
Production was started in April 1983 through a fixed drilling and production platform, peaking at 86,500 barrels of oil per day in May 1983.
In total the field produced about 120million barrels of oil, five million barrels equivalent of natural gas and 78 billion cu ft of gas.
Due to high operating costs of the platform, low oil prices and a high cost of importing gas for fuel, the field ended production in 2002 and was decommissioned.
Producable fields had been found to the south of the field, but they had been deemed uneconomic to develop at the time because of the distance to the North West Hutton platform.
Mr Sharp, whose firm bought the licence in 2009, said reshooting seismic in 2009 and some “mature field detective work” has helped to unlock the field.
“It is all about detective work,” he said, “using information we have from previous the production history and extrapolating what we might be able to do.”
The field was renamed Darwin by Fairfield in 2009 after the famous scientist as it was the 200th anniversary of his birth that year.