North Sea Buchan partners reach deal for Western Isles FPSO
Offshore staff
LONDON — NEO Energy and Jersey Oil & Gas have executed agreements with Dana Petroleum to acquire the circular FPSO that produces oil from the Western Isles fields in the UK northern North Sea.
They plan to redeploy the vessel to serve as the processing platform for the redevelopment of the Buchan Field in the central UK sector. Work is advancing on FEED activities to enable approval of the field development plan (FDP) in 2024.
JOG revealed in July that a redeployed floater was the preferred solution for the redevelopment of the Greater Buchan Area (GBA), as it offered the lowest cost option and the lowest full-cycle carbon footprint of all the concepts evaluated.
It enables the reuse of existing infrastructure that can be positioned directly over the Buchan Field, with limited modifications to make the FPSO electrification-ready following the redeployment.
That will allow the vessel to connect to one of the anticipated area-wide floating wind power developments planned close to the GBA, following this year’s awards under Crown Estate Scotland’s Innovation and Targeted Oil & Gas lease round.
Britain’s North Sea Transition Authority (NSTA) recently issued a letter confirming it had no objections to the Concept Select Report recommendation of reusing the Western Isles FPSO.
NEO is acquiring the platform on behalf of the Buchan Field partnership. The company already has a 23.0812% interest as Dana’s partner in Western Isles. The platform started operations in early 2017 but is due to come off-station around the second half of next year to coincide with the planned cessation of production of the Western Isles fields, following disappointing production performance.
After handover of the vessel has taken place, a relatively straightforward work program should follow to prepare for the redeployment on Buchan, comprising the installation of water injection booster pumps, produced water injection modifications, and preparation of the vessel for future electrification.
The work should be completed by early 2026, allowing for transport to the field location and hookup ahead of the planned startup in late 2026.
Under the agreement, the Buchan Field partners have committed to acquire the vessel following receipt of NSTA approval for the Buchan FDP. They will also take on the costs of storing the vessel from the handover date, expected in second-half 2024.
Following its transaction with NEO earlier this year, JOG plans to farm out a further interest in the GBA licenses, ultimately retaining a fully carried 20% to 25% stake in the Buchan redevelopment.
As for the ongoing FEED studies, the focus is on specification of the planned drilling program, design of the subsea infrastructure connecting the wells to the FPSO, and finalization of modifications to prepare the FPSO for its new role.
Preparation also continues for the environmental statement, which should be submitted to the regulator prior to the end of the year, along with the draft FDP.
Subsequent development phases will likely involve the tieback of the Verbier and J2 discoveries elsewhere in the GBA license area and potential tiebacks of regional third-party discoveries to the FPSO.
11.17.2023
