Chevron Corporation Sees Even Greater Potential In The North Sea Fields

Date : Oct 12, 2017 Author : PMR Editorial Staff Category : Chemical and Material

American supermajor seeks to extend Captain fields and develop Rosebank

Chevron Corp. has recently reinforced its commitment to the North Sea by reigniting a bidding process that would unlock the potential of the region’s biggest undeveloped field and extend the longevity of one of its strategic assets in British waters. The company, a major player in the process oils market, wants to develop the key Rosebank oil & gas field located to the north-west of the Shetland Islands. Even though the field was discovered more than a decade ago, the higher cost as a result of poor weather and the deep sea drilling stifled progress. Chevron has tried to reduce the project cost since the oil crash of 2014 but its halting of an order touching US$ 2 billion for a floating production and offloading vessel led to fears that it would abandon this development.

Chevron dispelled such rumors by clarifying that it would reinitiate the production vessel tender process. The company hopes to issue invitation bids for the FPSO project at Rosebank later this year. While a final decision may well take several more years, the move is certainly a step in the right direction and shows that Chevron and its partners such as Ineos, Siccar Point Energy, and Suncor are committed to this venture. This is particularly vital as approx. 300m barrels of oil may be recoverable from this field. Greta Lydecker, Chevron Upstream Europe President and MD, stated that Chevron had reduced their Rosebank costs by almost 30% when compared to the pre-crash oil costs. The company had not made its Rosebank cost public initially but it was estimated to be in the range of US$ 10 billion four years ago.

Chevron expects to make an investment decision very soon on extending the lifespan of its Captain field that has been producing oil for 20 years now. The “enhanced oil recovery program” consists of injecting polymerized water into the oil reservoir and will comprise of two parts. Analysts opine that the endeavor at Captain will be significant because of the technology deployed, it being less than Rosebank in production terms notwithstanding. Regulators and miners have urged companies in the area to pursue new technologies to extract the maximum possible oil & gas barrels from the estimated reserves of 20bn located in the North Sea. This is imperative when petroleum prices are poised to remain low for the foreseeable future. The Rosebank vessel tender process and the Captain investment decision are both likely before the end of the year.

Several oil majors actively involved in the process oil market have sold their North Sea assets this year, fuelling concerns that Big Oil is retreating from this key region. Analysts suggest that the supermajors are focusing on mature fields where it is possible to extend production. BP is an example of a company that has made its commitment to the North Sea extremely clear. The area where Rosebank is located is of intense interest to oil majors as it is considered the final frontier where large discoveries could still be made. Many have acquired licenses this year and more are predicted to follow.

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