Dr. Iain Watt
Technical Director-U.K. Operations
Enterprise Oil plc
London
One of the largest U.K. North Sea oil discoveries in recent years has taken a vital step nearer to first oil production. Installation of topsides on the Nelson field jacket during August clears the way for hook-up and commissioning in the run-up to initial production in the spring of 1994.
Installation of the 8,500 metric ton jacket involved a 7 hr operation on Apr. 13 this year. The Nelson jacket was the first that development operator Shell U.K. Exploration & Production had mated with a subsea drilling template.
The jacket was put in place in an early weather window to maximize the time available for pipelaying and subsea tie-ins around the platform and for the topsides installation. The jacket was installed by HeereMac Vof, Leiden, Netherlands, with the heavy lift barge DB102.
Once the jacket was in position, 12 piles weighing 425 metric tons each were stabbed into sleeves, driven 200 ft into the seabed, and grouted to the structure.
The integrated deck, containing most of the topsides equipment including production facilities, was due to be lifted into place in August. At 9,900 metric tons, this will be among the heaviest lifts in the North Sea. Separate lifts will be carried out for the drilling derrick/substructure, drilling module, living quarters/helideck, and flare boom.
When operational, the topsides will weigh 22,000 metric tons. Hook-up and commissioning will take place between September and March 1994, in readiness for first oil production.
NELSON DETAILS
Nelson field, on Block 22/11, will be one of the largest U.K. developments of the 1990s. Proved and probable reserves are put at 480 million bbl of oil and 85 bcf of sales gas.
Production will be through 20 platform oil wells and up to five subsea wells at the southern area. Santa Fe rig 135 drilled eight of the main platform wells through a template 275 ft below sea level, with a further two at the subsea satellite.
Nelson production facilities will han,e a peak capacity of 160,000 b/d of oil and 65 MMcfd of gas. Reservoir pressure will be maintained by seawater injection at up to 150,000 b/d. Well productivity will be improved and later sustained with gas lift.
Oil will be exported through a 20 in. pipeline to the new Unity riser platform, near the BP Exploration Operating Co. Ltd. Forties C platform, 25 km away (Fig. 1). It will then be transported to Cruden Bay on the Scottish mainland and then overland to Kinneil next to BP's Grangemouth refinery near Edinburgh. At Kinneil it will be . stabilized before transfer and shipment from Hound Point in the Firth of Forth.
Associated gas will be exported through a 10 in. pipeline extending 48 km to the existing Fulmar gas pipeline, near the Shell/Esso Kittiwake platform, and then to the Shell/Esso gas plant at St. Fergus, north of Aberdeen, for separation of NGLs and dry gas.
DUAL OPERATORSHIP
A number of aspects of the Nelson project have been innovative, particularly its operating arrangements. Initial field development, including design, construction, hook-up, and commissioning of the platform, subsea satellite development, and export pipelines, is being carried out by Shell U.K. Exploration & Production on behalf of the coventurers.
Predrilling activities, involving eight wells drilled through a template and two at a subsea satellite area to the south, have already been undertaken by Enterprise Oil plc. Predrilling was completed in October 1992, ahead of schedule and within budget.
Enterprise will assume operatorship of subsequent drilling operations and all production operations after first oil. This planned transfer of operating responsibility from one company to another is a unique arrangement in the U.K. North Sea.
It also marks the arrival of Enterprise as the newest production operator in the North Sea. While Enterprise operates a producing field in Indonesia and has an established drilling record as an operator, Nelson will be the company's first U.K. operatorship.
Enterprise assembled a project team with more than 700 years of combined oil industry experience to form the production operations team for Nelson. The drilling and production platform will have a crew of 110 at most, with obvious safety benefits and cost efficiencies.
Training of 55 core platform staff will have involved around 1,800 training days for safety procedures and 2,900 days on equipment usage by the time Shell hands over operatorship at first oil.
CONSTRUCTION
The design of the Nelson platform and its facilities, managed by Shell Expro, takes into account lessons from the Piper Alpha tragedy and the recommendations of the Cullen inquiry.
The process facilities on the Nelson platform are relatively straightforward, with the emphasis on safety and environmental protection.
Risk assessment techniques played a major part in designing the Nelson platform to ensure optimum layout of equipment and escape routes. Process equipment is farthest from the living quarters, with utilities between them. The living quarters and main control room are linked to create an integrated safe refuge protected by fire and blast walls, which also shield the access routes to the freefall lifeboats.
AMEC Engineering Ltd., London, designed the Nelson topsides; Earl & Wright, London, designed the jacket; and Andrew Palmer and Associates Ltd., London, designed the pipelines.
Redpath Offshore Ltd., Middlesbrough, carried out fabrication, loadout, and sea-fastening of the integrated deck and flare boom. Construction was at Redpath's Port Clarence Yard in Middlesbrough.
RGC Offshore at Methil, Fife, fabricated the jacket and piles. Fabrication of the drilling modules and living quarters was carried out by two Norwegian contractors, Aker Stord AS and Leirvik Sveis AS respectively, both based at Stord.
Much of the precommissioning and hook-up was carried out at the end of the fabrication stage onshore.
FORTIES BOOST
Nelson crude oil will become a significant component of Forties Blend. Indeed, Forties could become the 11 crude of the '90s." Some observers suggest that there are arguments for Forties Blend to displace Brent Blend as the industry marker grade and the basis of the forward market.
Production handled by the Forties pipeline system is due to increase from around 450,000 b/d in 1992 to over 800,000 b/d by the end of 1993, following the start-up of production from Everest/Lomond, the T-Block, Bruce, and Scott and to increase even further to a pipeline capacity of 1 million b/d by mid-1994, when East Brae and Nelson have joined the stream.
Enterprise, with its 31.6% direct share of Nelson in addition to a 12-88% working interest in Scott, again subject to redetermination, is set to become the largest single equity seller of Forties Blend by the mid-1990s.
This is not the only impact Nelson will have on Enterprise. By 1995, the first full year of Nelson contribution, Enterprise's production is anticipated to rise to over 250,000 b/d of oil equivalent from 145,000 b/d in 1992.
The raised production profile given by Nelson will have significant financial ramifications for Enterprise. Participation in two of the biggest U.K. North Sea projects of the last decade, Nelson and Scott, which have a combined gross project cost of around 2.5 billion ($3.7 billion), has demanded that Enterprise pay close attention to its balance sheet.
EXPLORATION
As Nelson oil flows ashore, so Enterprise's cash flow will increase. The cash flow will provide the base from which Enterprise expands its exploration activities.
The international focus of future exploration activity may well have been given a boost by the recent changes to petroleum revenue tax (PRT) proposed by the U.K. government.
Nelson and Scott were already set to become two of the major PRT-paying fields in the mid-1990s, before the rate of tax was reduced from 75% to 50%.
While the lower rate will undoubtedly benefit the equity owners of these two fields, future exploration activity in an already mature oil province must take into account the abolition of PRT relief against exploration costs.
While the tax changes should extend the working life of older, higher cost fields, discoveries such as Nelson and Scott have already been developed and made to work in the current oil-price environment.
Prudent financial management, supplemented by selective and innovative equity raising such as the U.S. cumulative preference shares, has enabled gearing (the ratio of debt to equity) to be kept at manageable levels-crucial at this key stage of the investment cycle.
Seven companies are participating in the development. Major shares are held by Enterprise, Shell/Esso, and Elf Enterprise Caledonia Ltd., with smaller interests held by Svenska Petroleum Exploration AB, Neste Production Ltd., Elf Petroleum U.K. plc, and Total Oil Marine plc. The first redetermination phase in under way in the process to establish eventual equity interests of all the partners.
Nelson is one of an array of new North Sea field developments over the next few years. Its production life will contribute to a second peak in U.K. North Sea oil production anticipated for 1997, when it is expected to rise to 2.91 million b/d.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
