Premier signs Shelley field FPSO deal

Uchenna Izundu
OGJ International Editor

LONDON, Apr. 21 -- Premier Oil PLC plans to continue development of Shelley oil field in the UK North Sea after signing a memorandum of understanding with Sevan Production UK Ltd. to use the floating production, storage, and offloading system.

Premier Oil is purchasing Oilexco North Sea Ltd. (OSNL), former operator of Shelley, which went into administration for insolvency in January after failing to secure finance for its development program (OGJ Online, Mar. 27, 2009).

Shelley, now being drilled, is expected to produce more than 30,000 b/d starting in summer with the Sevan Voyageur FPSO, which is already moored at the field.

Sevan expects to operate the FPSO and receive reimbursement for the operating cost and a tariff payment based on actual monthly revenue from oil production from the field. "Work will now commence towards conclusion of a fully-termed agreement," said Premier Oil

Timing of Shelley's production depends on the availability of diving support vessels.

OSNL's creditors approved a company voluntary arrangement that will help in the $505 million sale of the company to Premier Oil. It is awaiting approval from its shareholders, among other measures, before the deal can be finalized.

Contact Uchenna Izundu at uchennai@pennwell.com.

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