Quad 204 develops Schiehallion, Loyal fields
BP (ticker: BP) announced first oil today from its Quad 204 project, redeveloping the Schiehallion and Loyal fields in the North Sea.
The Schiehallion and Loyal fields have been producing since 1998, producing an estimated 400 MMBOE in total. Both fields are west of Shetland, and are directly north of Scotland. BP estimates that the two fields have an additional 450 MMBOE of resource still available. To access this, the company sanctioned the Quad 204 project in 2011.
Source: BP
Primarily, Quad 204 involves replacing the previous Schiehallion FPSO (floating production, storage and offloading vessel – FPSOs are deployed for offshore production in locations that have little infrastructure and serve as gathering, processing and storage facilities for fluids produced from subsea wells which are stored in the ship’s hull before they are offloaded to pipelines, barges, or ships—Schlumberger) with a new, more capable FPSO.
BP reports the new FPSO, the ‘Glen Lyon,’ is the world’s largest harsh water floating, production, storage and offloading vessel. The vessel will be able to process and export up to 130 MBOEPD, and store up to 1 MMBO. The Glen Lyon was constructed by Hyundai in South Korea, and took six months tow to its destination west of Shetland.
Source: BP
Up to 20 wells will be drilled—BP believes field life is extended to 2035+
In addition to the improved capability FPSO, Quad 204 involves major upgrades and replacements to the subsea facilities and a drilling program of up to 20 new wells. Eight wells have already been drilled and completed prior to startup. Production is expected to ramp up to a plateau of 130 MBOEPD, and sustain this level for several years.
The company estimates that this project will extend the life of the fields out to 2035, if not beyond. According to Bloomberg, BP and its partners have invested £4.4 billion ($5.7 billion) in the Quad 204 project.
Shell, Siccar Point are partners
BP is the operator for both the Loyal and Schiehallion fields. BP and Shell (ticker: RDS.A) each have a 50% ownership in the Loyal, while BP owns 33.3%; Siccar Point Energy has 11.8% and Shell has 54.9%. Shell’s Schiehallion share is changing, as the company announced in January its plans to sell 10% of its stake to Chrysaor as part of a larger deal.
Quad 204 is the third of seven major projects BP expects to bring online this year. The offshore compression project in Trinidad and the Taurus/Libra project in Egypt have already started up. New projects starting up in 2016 and 2017 are projected to deliver 500 MBOEPD of net new production capacity by the end of the year. By comparison, the Permian is projected to add about 490 MBOEPD of production from today to the end of the year.
