Tax relief allows Talisman to redevelop Beatrice field in the UK
Talisman Energy Inc. Friday announced plans for a �32 million redevelopment of the marginal Beatrice field on Block 11/30a in the inner Moray Firth after the British government granted unique tax relief. The Beatrice Life Extension Project would add 5-10 years onto the expected producing life of the aging field.
LONDON, Mar. 9�Talisman Energy Inc.'s North Sea subsidiary Talisman Energy UK Ltd. Friday announced plans for a �32 million redevelopment of the marginal Beatrice field on Block 11/30a in the inner Moray Firth after the British government granted unique tax relief.
The Beatrice Life Extension Project would add 5-10 years to the expected producing life of the aging field.
Jim Buckee, Talisman's chief executive officer, said the redevelopment project was made possible by the government's granting royalty remission on the field, without which further investment by the company at Beatrice "would not have been financially viable."
The key feature of the Canadian company�s plan to extend Beatrice's producing life involves the laying of 60 km of pipeline to replace aging export infrastructure.
Refurbishment of the nearby Bravo platform and the drilling of two wells to access areas of "trapped" oil using a jack-up cantilevered over the installation, are also in the company's redevelopment project.
Talisman, 100% owner of the field, said a workover will be carried out on Bravo, while water injection would be increased, and dual electrical submersible pumps installed in all future completions at the field.
Beatrice is expected to peak at 15,000 b/d and average 10,000 b/d.
The redevelopment project will employ more than 60 offshore personnel and another 650 during the investment phase.
Trade and Industry Secretary Stephen Byers said the decision to grant Beatrice the extraordinary tax status, believed to be the first granted in the UK, had been made "in recognition of the substantial investment required to secure the remaining reserves in this mature field" following discussions with government-industry task force Pilot.
"Talisman has adopted an ambitious project to maximize the recovery of Beatrice's remaining oil reserves," said Byers. "In light of their investment and of the marginal economic viability of the project, I and my Treasury colleagues have agreed that royalties normally due to the government should be waived in this instance."
When Beatrice first came on stream in 1981, it was thought to hold 20.8 million tonnes of recoverable reserves. Peak production was in 1985 when the field produced 2.6 million tonnes.
The UK government Friday approved Talisman's �33 million subsea development plans for the small Hannay oil field on Block 20/5a of the North Sea.
The field, with reserves of 8 million bbl and a life expectancy of 8 years, will be brought on stream via a single horizontal well tied back to the Buchan Alpha platform, before being exported through the Forties pipeline system to St. Fergus.
"Hannay demonstrates how cooperation and alignment between operators and partners can unlock incremental value to the benefit of each other and allow the development of another North Sea field," said Buckee.
Asset deals were signed to re-align Hannay field ownership with that of Buchan. Working interests in Hannay will be Talisman with 86%, EDC Europe Ltd. 13%, and First Oil Expro Ltd. 1%.
Byers said, "The two developments announced today are symbolic of the future direction of North Sea oil and gas. The UK's expertise can provide engineering solutions to the economically viable and environmentally sensitive recovery of previously unattractive fields."
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