Downsized development will use tieback
Shell’s recent $556 million sale of North Sea properties has not diminished the company’s interest in the basin, as Shell has approved its second North Sea project this year.
The Fram field is getting a second chance at life, after Shell abandoned the play as uneconomic in 2013. First appraised in 2009, Shell planned to develop the field using eight wells and a new floating production, storage and offloading vessel (FPSO). However, further drilling showed a smaller reservoir than expected, so all development plans were cancelled.
Source: Shell
Today, Shell is back with a much less ambitious plan. The Fram field will be developed using only two wells, which will tie back into the existing Shearwater platform. This will significantly lower the cost of development, bringing the breakeven below $40/barrel.
Current plans call for drilling in late 2019 and early 2020, with first gas in mid-2020. Fram is expected to produce primarily gas, with small volumes of condensate. Production is predicted to peak at 30 MMcf/d and 800 BOPD, with a lifetime of seven years.
The development of Fram may be a good sign for North Sea operations in general, as there are many similar small accumulations of oil and gas that are generally regarded as too small to develop individually. The UK’s Oil & Ga Authority estimates there are over 300 accumulations under 50 MMBOE, so there is a significant number of opportunities if companies can make development economic.
Shell has approved one other North Sea development this year, is 50% owner in another
Shell’s other North Sea project is the redevelopment of the Penguins field. Approved in January, this plan calls for a new FPSO to develop the field. The new FPSO is itself a major milestone for Shell, as it is the first new manned installation for Shell in the northern North Sea in almost 30 years. The redeveloped Penguins field will have peak production of about 45 MBOEPD from eight new wells.
While not the operator, Shell also has a 50% stake in the Alligin field, which BP committed to develop in April. Like Fram, Alligin will consist of a two-well tieback into an existing production facility.
Source: BP
