The North Sea is yesterday’s news. Everyone knows that volumes are falling—the U.K.’s output has fallen to 1.43 million barrels of oil equivalent a day in 2013, from a daily peak of 4.5 million in 1999.
The government is desperate to counter the perception that North Sea oil is all but dead. So it has introduced tax breaks for companies prepared to take on more complicated developments and drain as much as possible from the mature basin.
Maersk Oil, JX Nippon and BP have chosen KBR London to engineer the technically challenging Culzean gas field in the North Sea, The Wall Street Journal’s Kjetil Malkenes Hovland reports.
Culzean is another addition to a string of highly complicated and costly developments on the U.K. shelf, including HPHT (High Pressure High Temperature) fields such as Culzean and BG Group-operated Jackdaw, and heavy oil fields like Statoil’s ongoing Marinerdevelopment. But technically challenging fields remain under threat from high oil-sector costs, as highlighted by the delay last autumn of the Statoil-operated Bressay field and the Chevron-operated deepwater field Rosebank.
The North Sea needs to increase production if it is to remain the home of global oil pricing. Platts, the oil pricing agency, has said it may consider bringing more crude streams into the Brent pricing system.
A potential savior is the giant Johan Sverdrup field, a Norwegian discovery that is expected to peak at 500,000 barrels a day, perhaps the highest output level of any North Sea field.Energy
