As oil prices begin to rise and exploration of the North Sea yields promising results, investment is returning to the area, in particular, with two large projects from energy big hitters BP and Centrica. These firms are injecting new life into this area by drilling new wells in mature fields and exploring new fields. Although there are environmental concerns about greatly increasing production from this area, this increased investment is predicted to be just the start in a return to interest in the North Sea.
A New Interest in Brownfields
The Chiswick field in the Southern North Sea has been in production for 11 years and Spirit Energy, a firm created by Centrica and German-owned Bayerngas Norge, announced they plan to invest £75 million to drill a new well in this mature field. It’s expected to allow access to a further 50 billion cubic feet of gas but the venture isn’t expected to create any new jobs in the area. Centrica already employ around 300 people in Aberdeen. Royal Dutch Shell has also revealed plans to redevelop the huge Penguins field north of Shetland which provided a big boost for North Sea industry.
BP made significant finds last summer which has lead them to announce they intend to double their production in the North Sea by 2020. The two new sites are near the Shetland Islands and in the central North Sea. One is solely owned by BP and the other is partially owned in a joint venture with Chevron and Shell. They hope to double their current production to 200,000 barrels a day by 2020 and keep producing up to 2050 and beyond. Shell also announced its intention to build its first new North Sea installation in three decades and, according to Oil and Gas UK, production in the area has increased year-on-year since 2013. A spokesperson from the World Wide Fund for Nature stated that these planned increases were irresponsible in the face of climate change concerns but Oil and Gas UK have predicted that up to $5.5 billion worth of new capital projects could be approved this year.
With Brent trading at around $69 a barrel at the end of January this year compared to less than $30bbl in the last quarter of 2016, things are looking up generally and with these investments and previous investments, such as the £35 million put in by Spirit Energy to drill an additional production well in the Chestnut field east of Aberdeen, suggest the North Sea is on the rise once more. Spirit Energy are also planning to drill an exploration well in the Southern North Sea this year. For companies who want to take advantage of all these new developments in the North Sea and embrace the surge in new technology being used to make the industry more efficient, accurate measuring equipment will be essential. That’s why Ex~I Flow Measurement developed our flow measurement computer which is flexible, accurate and easy to use to allow companies to make the most of these new developments. To speak to someone about how we can help you, call +44 (0)1243 554920 or contact us here.