By the OGJ Online Staff
HOUSTON, Sept. 4 -- UK Energy Minister Brian Wilson Tuesday said his ministry has approved the development of two northern North Sea fields.
Wilson said Shell Exploration and Production Ltd.'s Penguin fields and Canadian Natural Resources International Ltd.'s Columba-E project were examples of how new technology and innovative approaches can result in development of fields previously thought to be uneconomic.
He said the Penguins, a cluster of five fields (Penguin A to Penguin E), are one of the largest undeveloped accumulations in the North Sea and represent Shell Expro's largest single investment into the UK continental shelf since 1996.
Penguins reserves are estimated at 88 million boe of oil, gas, and condensate and will require a £350 million investment. The fields will be developed via a 65-km subsea tieback to the Brent C platform, which will be the longest subsea tieback off the UK.
The energy ministry said, "Penguins development represents a major fillip for the northern North Sea and demonstrates that there are plenty of remaining opportunities in this mature area."
Shell Expro has 50% and Esso Exploration & Production UK Ltd. 50%.
Columba "E" Terrace, operated by CNR International (UK) Ltd., is an oil accumulation at the edges of giant Ninian oil field.
The ministry said Columba E Terrace had marginal economics and it and the Treasury Department negotiated a royalty agreement to encourage development.
As part of Ninian, it was liable to both royalty and petroleum revenue taxes, in addition to corporation taxes.
The ministry said that since the reserves would not have been developed without a royalty reduction, "This is a win-win situation for CNR International, their partners, and the Exchequer. Further development of Columba E is anticipated to access up to an additional 25 million bbl of incremental oil reserves."
Columba E Terrace partners are CNR 34.06%, Kerr McGee North Sea (UK Ltd. 26.04%, AGIP (UK) Ltd. 25.7%, Marubeni Oil & Gas (UK) Ltd. 8.40%, and Murphy Petroleum Ltd. 5.8%.