BP adds two discoveries to North Sea portfolio

BP PLC is considering a possible tie-back development for its Capercaillie discovery on Block 29/4e in the central North Sea. A second discovery, the Achmelvich on Block 206/9b in the West of Shetland area, is being evaluated to assess further options.

Content Dam Ogj Online Articles 2018 01 180131 Bp Northsea Map Final

BP PLC is considering a possible tie-back development for its Capercaillie discovery on Block 29/4e in the central North Sea. A second discovery, the Achmelvich on Block 206/9b in the West of Shetland area, is being evaluated to assess further options.

The 100% owned Capercaillie well was drilled to a total depth of 3,750 m, encountering light oil and gas condensate in Paleocene and Cretaceous-age reservoirs. Well data is under evaluation, BP said.

The Achmelvich well includes partners Shell 28% and Chevron 19.4% with BP as operator holding 52.6% interest. The well was drilled to 2,395 m, encountering oil in Mesozoic-age reservoirs.

Both wells were drilled by the Paul B. Loyd Jr. rig las summer.

Content Dam Ogj Online Articles 2018 01 180131 Bp Northsea Map Final

BP expects to double its North Sea production to 200,000 b/d by 2020, continuing production through 2050, said Mark Thomas, BP North Sea regional president. The operator expects both discoveries will lead to further additions to its North Sea, which includes major developments like Quad 204 that came onstream in 2017 (OGJ Online, May 22, 2017). Clair Ridge and the non-operated Culzean field, which are expected to come into production in late 2018 and 2019, respectively (OGJ Online, June 25, 2015 and July 21, 2017).

In response to BP’s announcement, Fiona Legate, Wood Mackenzie senior analyst, North Sea Upstream, said that “majors operated around 30% of the 22 exploration wells drilled in the UKCS” in 2017. BP and Statoil were most active.

Despite BP’s recent divestments in the North Sea, the operator is “clearly still committed to the UK,” Legate said. Production from the core West of Shetlands developments Clair and Schiehallion will ramp up in the near term, according to Legate. But WoodMac estimates BP’s UK production will reach 180,000 b/d in 2020, which “highlights the gap future investments can help to fill.”

WoodMac said, “Despite its recent divestments in the North Sea, BP clearly is clearly still committed to the UK. It plans to double production by 2020 to 200,000 b/d. Development of these two discoveries, plus other opportunities in its portfolio will help to achieve this target. Production from the core West of Shetlands developments Clair and Schiehallion will ramp up over the near term. We estimate BP’s UK production will reach 180,000 b/d in 2020 which highlights the gap future investments can help to fill.”

WoodMac also pointed out the lack of transparency for new UKCS discoveries. “The only official number released for discovered resource in 2017 is 172 MMboe,” Legate said, citing the UK Oil & Gas Authority. Current rules give companies 5 years to reveal well results after making a discovery, which can block investments. “Switching to a Norwegian-style model of announcing reserves at the time of discovery could help the supply chain to evaluate new business opportunities,” Legate said.

Contact Tayvis Dunnahoe at tayvisd@ogjonline.com.

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