BP, partners to proceed with new appraisal program on UK Clair field


BP, partners to proceed with new appraisal program on UK Clair field


LONDON -- BP and its partners Royal Dutch Shell, ConocoPhillips and Chevron are proceeding with a two-year appraisal program to evaluate the possibility of developing a third phase of the giant Clair field, west of the Shetland Islands.

BP and its partners have already committed around $10 billion to the Clair development so far, and will spend a further more than $500 million for the first five appraisal wells in this two-year appraisal program, BP said.

The west of Shetland area is important as it has the greatest potential to expand UK offshore oil and gas production, which is a vital contributor to the U.K. economy in terms of tax receipts and jobs. Over 1 billion barrels of oil equivalent of reserves are currently in development in the west of Shetland area and will come into production over the next one to five years, making it the UK's second largest producing region, according to industry body Oil & Gas.

The Clair development, which is located 75 km west of Shetland, is proceeding because of the companies' growing confidence it can access the resource in the technologically challenging field, BP said.

"This is a major milestone and a further big commitment to the west of Shetland by BP and its co-venturers. If successful, the appraisal program could pave the way for a third phase of development at Clair--this is now a real possibility," said Trevor Garlick, Regional President for BP North Sea.

The initial commitment involves a two-year program to drill five appraisal wells. This could increase to between eight and twelve wells, depending on results from these first wells. Drilling of the first well has already started, BP said.

The appraisal program aims to provide greater certainty on overall reservoir volumes, including their distribution and characteristics, to evaluate technologies to improve recovery from Greater Clair and to test the possibility of new standalone developments and linkages to Clair Ridge, BP said.

Production from the Clair field commenced in 2005 from the first phase facilities and has so far produced around 90 million barrels. The first phase facilities are designed to continue producing until 2028. Production from the second phase is expected to start in 2016. Peak production is expected to be up to 120,000 barrels a day.

Last month, Oil & Gas UK said companies were planning investments totaling around GBP100 billion on the U.K. Continental Shelf. Investment is expected to rise to a record $21.2 billion in 2013, up from $17.26 billion in 2012.

Dow Jones Newswires

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