Delays caused by FPSO regulatory compliance and construction issues have pushed the start of production from the UK's Western Isles Development back to Q3 2017, reveals a GlobalData report.
Entitled United Kingdom Western Isles Development Project Panorama – Oil and Gas Upstream Analysis Report, the report states that the delays in development have caused the project cost to rise from $1.6bn to approximately $2bn. Comprising Harris and Barra fields, the project is expected to yield 40,000bpd of oil at peak, representing a 5% increase in the UK’s total production.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Plagued by delays and increasing capital expenditure, as well as low global oil prices, the economic profitability of the project has been significantly reduced. To be profitable, the development requires either a turnaround in the commodity prices or reduction in costs as it is currently estimated to breakeven at approximately $95 a barrel.
Western Isles development’s net present value will be doubled if a 20% increase occurs in the commodity prices or enhanced/improved oil recovery techniques are applied.
The GlobalData report also mentions that the project’s economic viability can be enhanced by minimising downtime, increasing production efficiency and developing neighbouring assets as tie-backs.
The total number of wells at the field reached five after the Ocean Guardian began drilling at the southern drill centre in March 2016. The northern drill centre is scheduled to be targeted after four months with drilling activities expected to continue up to March 2017.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe project’s FPSO is currently docked at the COSCO yard and is expected to sail away in November. This will be followed by the hooking up of the subsea wells to the FPSO once it arrives in March 2017. The field is estimated to hold 100 million metric barrels (Mmbl) of oil. However, the operator Dana Petroleum reported feasibly recoverable reserves at the field as being 45Mmbl.
