UK-based oil exploration company Hurricane Energy has signed a heads of terms deal with Bluewater Energy Services to use Aoka Mizu Floating Production Storage and Offloading Vessel (FPSO) on Lancaster field, west of Shetland.
Hurricane plans to use this Aoka Mizu FPSO for Early Production System (EPS) phase of development. It will also have the right to extend the contract for up to ten years.
Under the agreement, Bluewater Energy (BES) has given Hurricane an exclusive right to enter a fully termed agreement until November 2017.
The heads of terms signed between the companies underlines the commercial terms between BES and Hurricane. It includes the cost and terms of the upgrade and life extension work with subsequent charter rates throughout the expected contract life.
It also sets the scope of work that will ensure that Aoka Mizu fulfills Hurricane’s requirements for deployment at Lancaster.
Hurricane chief executive Dr Robert Trice said: “Hurricane is delighted to have entered into an FPSO agreement for the Lancaster EPS. This will allow us to maintain our desired first oil date of H1 2019 and further demonstrate the potential of fractured basement reservoirs in the UK.
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“We are grateful to BES both for the strong commitment they have shown to the Lancaster project and for their innovative approach to working with Hurricane. We have a strong strategic and commercial alignment and this collaborative approach is already reflected throughout all aspects of the ongoing technical work on the project.
“As our current drilling campaign continues to assess the full regional potential of our acreage, this agreement is another important milestone in our efforts to move Lancaster towards production, creating value for our shareholders and for the UK.”
After signing of the heads of terms, both companies have started a second phase of FEED study, which is expected to be completed by the second quarter of 2017.
Image: Hurricane Energy offshore field. Photo: courtesy of Hurricane Energy.