LONDON (Alliance News) - BP PLC Wednesday said it has begun drilling on the Loyal field in the North Sea, which is part of the Schiehallion joint venture with Royal Dutch Shell PLC and OMV, marking the start of a seven year drilling campaign west of Shetland.
The Loyal and Schiehallion fields are part of a joint venture between the three companies with BP operating both fields. BP and Shell both have a 50% stake in the Loyal field, whilst BP has a 33.35% stake in the Schiehallion field with Shell owning 54.89% and OMV holding the balance.
The drilling on the Loyal and Schiehallion fields will be conducted using a new-build, semi-submersible Deepsea Aberdeen rig provided by Odfjell Drilling, and will initially drill two producer wells and one injector well on the Loyal field before moving to the Schiehallion field to continue drilling activity.
Five wells are planned to be drilled prior to first oil from the new Glen Lyon floating, production, storage and offload vessel at the end of 2016, said BP. The new Glen Lyon FPSO replaces the Schiehallion FPSO, which started production in 1998.
"This marks an exciting and important milestone for both the Quad 204 project and our wider North Sea business. The drilling campaign not only demonstrates our commitment to the region in what is a challenging time, but will also help maximise production from Schiehallion and Loyal, contributing to the long term competitiveness of BP?s North Sea business," said Trevor Garlick, regional president for BP's North Sea business.
In July 2011, BP and its partners announced their intention to invest around GBP3.0 billion to re-develop the Schiehallion and Loyal fields as part of its Quad 204 project. Schiehallion and Loyal have produced nearly 400 million barrels of oil since production started in 1998. The Quad204 development aims to access the remaining estimated 450 million barrels of resource still available and help extend production from the fields out to 2035 and beyond.
BP shares were down 1.1% to 471.11 pence per share on Wednesday afternoon whilst Shell 'A' shares fell 0.8% to 2,045.60 pence and 'B' shares dropped 0.7% to 2,069.00 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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