WATCHING THE WORLD BRITANNIA CAUGHT UP IN MENAGE A TROIS

WITH DAVID KNOTT FROM LONDON Look at Britannia field on a map of North Sea,license blocks and the word "complicated" leaps to mind. The reservoir does not lie neatly in one tract. It sprawls across Blocks 15/29a, 15/30, 16/26, 16/27a, and 16/27b. Twelve companies hold interests in these blocks. Conoco (U.K.) Ltd. and Chevron U.K. have the biggest stakes and performed most of the exploration and appraisal work. They became joint operators, a marriage of equals without precedent in the North

May 31, 1993

3 min read

Look at Britannia field on a map of North Sea,license blocks and the word "complicated" leaps to mind.

The reservoir does not lie neatly in one tract. It sprawls across Blocks 15/29a, 15/30, 16/26, 16/27a, and 16/27b.

Twelve companies hold interests in these blocks. Conoco (U.K.) Ltd. and Chevron U.K. have the biggest stakes and performed most of the exploration and appraisal work. They became joint operators, a marriage of equals without precedent in the North Sea.

Unconventional relationships are keys to recovery of Britannia's reserves.

Britannia's biggest problem is that it does not promise a high rate of return, so costs will always be under the microscope. However, it is the largest undeveloped U.K. discovery at present. Recoverable reserves are placed at 2.5-3 tcf of gas and 150-200 million bbl of condensate.

SALES, COSTS

"Although Britannia field will benefit from recent Petroleum Revenue Tax reforms, we do not yet know the full value profile of the project," explained Britannia Project Manager Jeff Tetlow.

"We are still discussing gas sales in the U.K. and Continental Europe, and so will not be taking investment decisions until later this year. Development plans and budgets will be finalized in the fourth quarter, so we can apply for development plan approval in first quarter 1994. The target is to produce first gas in October 1997. So far we are on schedule."

Conoco and Chevron believe the best way to keep costs down is to bring the engineering contractor and possibly the fabricator into the project team to get away from arms length, confrontational" arrangements typical between operator and contractors.

THREE'S COMPANY

AMEC Engineering Ltd. London, was awarded preliminary engineering of in field facilities. Total cost is likely to be L8OO million ($1.2 billion ) for a platform in Block 16/26 and two subsea clusters in Blocks 15/29a and 15/30.

AMEC will make up a major part of the Britannia alliance, providing 90% of the 400-500 strong engineering team. The contractor's role will be to make sure "fit for purpose" engineering and fabrication can be achieved at the least cost.

Discussions with fabricators will start soon. Similarly, results of talks with other operators on liquids and gas export routes will be compared with pipeline and offshore loading solutions. For some development work, traditional lump sum contracts may be preferable.

A relationship between two operators and a contractor may appear like a storyline from a French film. Neither Conoco, Chevron, nor AMEC has worked in a menage a trois before, so they are deciding the rules as they go along. "We're proceeding cautiously at first but it's working fine," Tetlow said.