Arguably the bellwether of UK North Sea oil and gas production the BP that we know today grew out of Anglo-Iranian with the name British Petroleum Company formalised in 1954.
Though Middle East-focused, it searched for UK reserves for decades, making only minor finds onshore.
It was not until 1964 after the United Nations extended countries’ rights over territorial waters and the UK Continental Shelf was carved out that North Sea exploration could begin.
BP was among the first out of the first licensing gate and, in winter 1965, it located natural gas in the Southern North Sea working with the rig Sea Gem.
Reality was that it had been a lousy year for the putative North Sea industry, then primarily run out of Great Yarmouth and it ended badly when, having only just found the huge West Sole gasfield, the Sea Gem was overwhelmed in a storm, sinking on Boxing Day.
By an incredible stroke of luck, the crew of the passing steamer Baltrover spotted the rig in difficulties.
But for the Baltrover and the fact that a crew change helicopter had unwittingly just taken off from Tetney near Grimsby, as rig toppled, everyone could have perished. As it was, 13 lives were lost.
Chastened but undaunted by the disaster, BP was to push on with West Sole, which was declared ready for production by mid-1967.
By then, the UK economy was in desperate straits. Sterling was devalued, inflation was rampant and Prime Minister of the day, Harold Wilson, called in the International Monetary Fund.
Hope was pinned on the North Sea; plenty of gas was being found though not yet oil. Cynics were already branding it a five-minute wonder with nothing for Scotland likely.
Striking oil at a key time for Aberdeen and the UK
At that time Aberdeen was having its own crisis and, in its Review of the City of Aberdeen, July 1969, the Press and Journal devoted just 33 words to the search for oil and gas in the North Sea. This was four years after Shell and then BP opened city offices in 1965.
Just three months after the review was published, the outlook began to change dramatically.
It was an obligation well drilled by Amoco (later merged with BP) in September 1969 on block 22/18 that changed the course of the UK hunt.
A stroke of luck for a drilling crew who had expected to find gas but encountered oil, albeit only a modest light crude discovery.
The find was made just 120 miles east of Aberdeen. Initially non-commercial it was not developed until the late 1980s.
There had been 22 UK gas discoveries prior to the Arbroath oil break. It was another five before the next find was made.
BP hit the jackpot in late 1970 with its world-class, 2 billion barrels Forties discovery 110 miles off Aberdeen.
The company initially underplayed its size in a deliberate attempt to gain advantage over grasping East Coast Scottish farmers as it sought to negotiate a pipeline route from the proposed landfall at Cruden Bay to the Grangemouth refinery on the Forth.
Bosses were able to keep the lid on Forties until December 1971 at a meeting in London when Alistair MacLeod Matthews of BP announced the size of the discovery. He was apparently received with a stunned silence lasting several minutes.
News of Forties came at a time of low oil prices. Such was the concern that some doubted the viability of developing the field.
The situation changed after 6 October 1973, when Egypt invaded Israel, starting the Yom Kippur War.
Notwithstanding local political difficulties in Aberdeen or anywhere else, BP got on with the task of bringing Forties oil ashore, but had to secure the biggest private financing deal ever arranged in Britain via a mix of sterling and dollars from an international syndicate of banks which put up £180million and $468million funding packages to cover projects costs.
Money secured, BP got moving but was pipped to first commercial oil by Canadian minnow Hamilton Brothers, which brought its modest Argyll discovery onstream in June 1975.
Wood Mackenzie Consultants has since asserted that BP could have brought Forties onstream in 1974 but for the lack of an adequate contracting sector coupled with sheer inexperience in building super-platforms.
Nonetheless, Forties was a triumph of engineering genius and guts, including fabrication of the offshore pipeline to Cruden Bay.
Forties was to boast the largest platforms ever built, with Laing at Graythorp on the Tees getting two and Highlands Fabricators on the Cromarty Firth being allocated the other two.
Notwithstanding, 1974 was a key discovery year for BP with its large Magnus oil find which was onstream by 1983.
And, in 1977, the company made the first west of Shetland discovery by locating Clair, a badly fractured heavy crude field with reserves estimated to be around 4 billion barrels but which defied early attempts to develop until engineers and geologists managed to find a way of drilling and building production wells that would work. This was achieved in the mid-to-late 1990s, clearing the way for eventual development.
The plan was to have £1.32 billion Magnus in production by the middle of 1983, the same year that Britoil located the Miller gasfield east of Peterhead and was taken over by BP.
Importantly, Britoil held the assets of the then-defunct state-owned British National Oil Corp.
BP share woes
At one point it looked as if Atlantic Richfield (ARCo) was going into head-on competition.
Indeed it made a friendly offer, including asset swaps and share purchases that would give it ownership of just less than half of Britoil. The ultimate objective was total control.
Another big purchaser of oil company shares at that time was the Kuwait Investment Office which announced that it had grabbed more than 15% of BP’s stock for over $1 billion.
The Kuwaitis’ move largely stemmed from the UK government’s decision to go ahead with its $7.24 billion sell-off of BP stock still in state hands despite the market crash of October 1987.
After the unsuccessful offering, underwriters were left with hundreds of millions of BP shares they did not want.
BP successes, large and small
Back to the chase for reserves, this time a small 1988 discovery east of Forties dubbed Cyrus. In this brief canter through 60 years of North Sea history it would be all too easy to concentrate on the big stuff. But Cyrus demonstrates the in-house prowess that enabled the company to bust frontiers.
Cyrus is distinguished by the solution devised by BP at the time, namely a new kind of floating production technology known as SWOPS.
The vessel named Seillean was a tanker equipped to produce oil. When its tanks were full, it would disengage the wellhead/s, take the cargo to market in Rotterdam or wherever, then return and repeat the exercise over and over again.
While the vessel successfully produced Cyrus and then Donan, Seillean became one of a kind. It was sold by BP to Reading & Bates of Houston in 1997 after Donan was exhausted.
Marching on to 1992, absolutely the biggest, most exciting event of the year was the discovery of the Foinaven field West of Shetland.
The news was broken by a writer several months before the company was prepared to confirm that the 204/24A-2 well drilled by the semi-submersible Ocean Alliance had made a substantial commercial find in the order of 250-500million barrels of oil.
This success in the P&J breaking news was to be repeated with BP made the neighbouring Schiehallion discovery in 1993.
It was the same year that the UK industry launched its Cost Reduction Initiative for the New Era.
This was a response to the first global oil price crash in 1986 and which hit the North Sea so hard that it was still reeling in the early 1990s.
The CRINE Network
BP was a leader throughout the CRINE (fields development), then CRINE Network (operating) period that ran up to the second global oil crash of late 1997 through 1999.
A significant number of projects were to be executed based on CRINE principles including BP’s Andrew (onstream 1996), Harding (first oil late 1995) and ETAP (onstream 1998) developments.
Clair phase one and was placed in the pipeline and quickly joined by Foinaven (onstream 1997) and Schiehallion (onstream 1998).
CRINE Network enabled more attention to be devoted to life extension brownfield work on existing fields. Forties is a case in point; Magnus too. Either sort them out or sell them on.
For example, in 1996, BP sold its MAST assets, a group of four fields and peripherals to Talisman, which took Beatrice, Buchan and Clyde but not Thistle.
Then the UK Labour government of the day got greedy. In 1998, Chancellor of the Exchequer Gordon Brown made a tax grab.
Clair phase one was iced with BP claiming prevailing oil prices were the “key problem”.
Then the $48.2 billion merger with Amoco was announced in August 1998.
BP and the New Millennium
And so to the New Millennium, peak production bolstered by rising oil prices and a decent outlook for the North Sea, with BP continuing its bellwether role by sanctioning £650 million Clair Phase One in 2001, bringing the field onstream in 2005.
A life extension project for Magnus was approved, the target being an extra 50 million barrels of oil through to around 2015.
An early disposal was Arbroath but then came the bombshell.
On January 12 2003, the super-major stated it had “Agreed in principle to sell its 96.14% stake in the North Sea Forties oilfield, together with a package of shallow-water assets in the Gulf of Mexico, to the US independent oil and gas company, Apache, for $1.3billion.”
It whipped up a political tornado with the Tories condemning Labour for having raised North Sea taxes 10% in the face of deep opposition from BP and the rest of the industry.
Storm abated, the industry shook itself and got back to work. In BP’s case, it primarily meant getting its West of Shetland assets working efficiently including the high-earning Forties pipeline which it still owned and later sold to Ineos in October 2017.
WoS included working up the next phase of Clair where in-place reserves had been upgraded to 7 billion barrels of moderately heavy crude, and working out what to do with Schiehallion after a decade of production from an unsatisfactory FPSO. The operator chose redevelopment rather than sale.
Both projects were sanctioned in 2011, Clair Ridge with two platforms and tie-in to the original Clair export pipeline; and Quad 204 (Schiehallion-plus) based on a new FPSO, the Glen Lyon, and renewal of much of the subsea infrastructure.
Quad 204 was brought onstream by May 2017. Clair Ridge was originally expected onstream in 2016 but slipped to late 2018.
The new facilities, which required capital investment in excess of £4.5 billion, were designed for 40 years of production.
Bernard Looney, at that time BP chief executive upstream, described the delivery of Clair Ridge as a “culmination of decades of persistence”.
As for Foinaven In April 2021, the company announced it would be retiring the Petrojarl Foinaven from operations as the vessel had reached the end of its design life. It was removed in 2022.
Rumours abound about the future of the asset with sale and redevelopment apparently both on the cards.
BP 60 years into North Sea exploration
For now, BP is looking to the next phase of Clair with the key final investment decision (FID) possible before the end of the year … or next.
ETAP chugs along. Andrew is late-life, and the company holds non-operated interests in Culzean and Vorlich, both in the Central North Sea.
In any case there is the issue of climate change. Indeed the United Nations said bluntly last year that rich countries should quit oil, coal and gas by 2040.
Options are strictly limited and even former group CEO John Browne agrees that no further UKCS exploration licences should be issued.
The North Sea is a key target for NGOs; they want it shut down now.
With climate change accelerating and clear warnings being delivered to Big Oil COP after COP after COP, BP probably innately knows the game is up.
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