AMERADA: TYPICAL '90s FIND NOT VIABLE WITH NEW TAX REGIME

Angus oil field, on U.K. North Sea Block 31/26a, typifies the North Sea development of the future, contends Amerada Hess Ltd. (AHL). And Angus, which started up in December 1991, would not have been developed under proposed U.K. budget tax reforms, said AHL Managing Director Sam Laidlaw. There may be major finds west of the Shetland Islands, he said, but the most likely commercial discovery will be small, marginal fields such as the 10 million bbl Angus.

March 29, 1993

2 min read

Angus oil field, on U.K. North Sea Block 31/26a, typifies the North Sea development of the future, contends Amerada Hess Ltd. (AHL).

And Angus, which started up in December 1991, would not have been developed under proposed U.K. budget tax reforms, said AHL Managing Director Sam Laidlaw.

There may be major finds west of the Shetland Islands, he said, but the most likely commercial discovery will be small, marginal fields such as the 10 million bbl Angus.

AHL puts the average commercial U.K. offshore discovery at about 30-40 million bbl, compared with an average 200 million bbl in the early 1980s.

Angus was developed with two subsea wellheads, producing about 20,000 b/d via flexible risers connected to the Petrojarl 1 production vessel. Crude oil is offloaded from Petrojarl into the Petroskald shuttle tanker.

AHL points to the fact that Agnus development went from concept to production start-up in only 12 months. Many oil companies would not have justified development at a projected profit of 2/bbl ($2.90/bbl), said Laidlaw.

But if developed after budget tax reform (see table), Angus profit would be only 10 pence/bbl (14.5cts/bbl), AHL said.

"Nobody would contemplate developing Angus at 10 pence/bbl profit," said Laidlaw.