Enquest this morning confirmed first oil from its flagship Kraken development.
Chief executive Amjad Bseisu said: “EnQuest is delighted to confirm that first oil has been achieved on the Kraken development, delivered on schedule and under budget. Drill centres 1 and 2 are fully complete and work continues on drill centre 3; as a result, further production capacity will come online into 2018 as these further wells are put onstream.
“Kraken is a transformational project, made possible by EnQuest’s differential capabilities; the right mix of integrated technical capabilities, high levels of efficiency and cost discipline. With production from Kraken, EnQuest is moving from a period of heavy capital investment, to a focus on cash generation and deleveraging the balance sheet.
“A further update and additional analysis will be provided with EnQuest’s 2017 half year results.”
First oil was achieved on June 23.
During the initial ramp-up period, the 13 wells that have been drilled and completed to date, comprising 7 producers and 6 injectors, are being brought online in a phased manner, to maximise long term productivity and value.
EnQuest’s head of major projects, Richard Hall, said: “The achievement of producing first oil from Kraken on schedule and considerably under budget is a great testament to the capabilities of EnQuest. I am extremely proud of the EnQuest Kraken team for their dedication, vison and sheer hard work and thank them for this exceptional performance. Our approach of rigorous planning, simplification of specifications and clarity in execution methodology has enabled us successfully to deliver this highly complex project.”
Oil and Gas Authority (OGA) chief executive Andy Samuel said the field’s success had the potential to open up additional heavy oil opportunities.
He added: “As one of the most significant oil field projects in the UK Continental Shelf, successful production from Kraken is positive news for the whole basin. It has the potential to open up additional heavy oil opportunities in the Northern North Sea, with other developments in the pipeline. It’s particularly pleasing to see a project delivered under budget, having clearly benefitted from a strong partnership between operator and key service providers.”
The field is expected to pump out about 50,000 barrels of oil per day by the end of the year via the Kraken FPSO. Field development costs totaled £2billion.
Enquest managed to see the project through despite development partner First Oil Expro going into voluntary administration and carrying its own debt pile of £1.4billion.
Energy Voice exclusively spoke to Neil McCulloch, EnQuest’s chief operating officer, about the milestone project. He outlined how the firm was able to push through the most debilitating downturn to date to deliver first oil. Read more here.
Enquest owns a 70.5% stake in Kraken. Cairn Energy owns the remaining 29.5%.
Kraken represents one of the cornerstones of EnQuest’s long term production portfolio. Kraken is a large heavy oil accumulation in the UK North Sea, located in the East Shetland basin, to the west of the North Viking Graben; approximately 125 km east of the Shetland Islands. It’s expected to have a 25 year lifespan.
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