BACK in the mid-1990s, Canadian group Talisman blazed its way into the North Sea via an asset deal with BP. However, one of the four so-called MAST assets, Thistle, was rejected.
Nor, it seems, could BP shift the field on to anyone else, at least not until DNO came along in 2002 and struck a conditional deal, that condition being that BP would retain decommissioning liability. It happens that Thistle was a field that BP tried to hawk to Oryx, which Lundin’s Alan Curran worked for at the time. Oryx was then building a mature assets portfolio around the Hutton, Murchison and Lyell fields, not forgetting Ninian.
“It wasn’t a particularly attractive proposition,” Curran recalled.
“The DNO deal was done at the time of a relatively low oil price and it was a win-win because BP was quite happy. And BP is still very happy for us to be investing in the field and deferring decommissioning, but we don’t carry that liability; it is BP’s responsibility.”
Remarkably, the last Thistle well was drilled in 1989 – almost 20 years ago. But that’s about to change, albeit not before heavy investment in rebuilding the field’s drilling package.
“It was called a rig refurbishment but, frankly, with the exception of the derrick, it has been rebuilt,” said Curran.
“We’ll work some wells over at the end of this year; we shot seismic last year, and the team are furiously working up the prospects. We’ll review them at the end of this year and we’ll drill the first well in 20 years in Thistle next year.
“I anticipate, based on my experience with fields like Murchison in years gone by, that we’ll see 10, 20 even 30 wells drilled in Thistle over the next five years and we’ll transform production currently running at 4,000-5,000bpd.
“It’s painful because we’re spending a lot of money on this field just now (£100million is currently being invested between Heather and Thistle). Performance is improving in terms of the facility and that’s important as Lundin’s in it for the long term. The corporation believes in backing its hunches large and has got to return that investment over the 2009-11/12 timeframe. I anticipate that production will go from 5,000 to 10,000-plus, possibly even 15,000bpd.”
So why did BP lose interest in Thistle in the first place?
Speculating, Curran feels that the field had ceased to be material. It was heavily developed in the early years, with intensive drilling in the 1980s, and the field produced vast amounts of oil. But lately it has been a huge washing machine for the vast quantities of water injected to sustain oil output.
“Last year, we injected up to 200,000 barrels a day into Thistle to get 4,000-5,000 barrels of oil out. That’s bucket chemistry. What we’re looking to do as we get an active drilling package again and start to repair wells, is be a lot more scientific about where we put the water and drill new wells.
“The 3D seismic shot last year will shed new light on the reservoir models and, from that, we’ll be able to rearrange the subsurface plumbing … get the injection wells in the right place for the field as it stands today as opposed to 10-15 years ago and get the producers in the right place, too.
“So there’s going to be a lot of activity on Thistle and I would anticipate a continuous drilling programme for several years. We carry about 29million barrels of 2P reserves in Thistle and just under 20million barrels of contingent resource.
“We believe there’s a lot more. Field life will be extended by 10 years with this investment.”
But it’s not just about the “native” oil in Thistle. Lundin is also chasing satellite/third-party opportunities regardless of its equity position. Moreover, the company has secured the Don fields development by Petrofac and partners as a satellite tie-in.
“Then we’ve got Causeway. We are in competition with Dunlin (Fairfield), but I believe we put in a very appetising bid to Antrim. That’s not as clear-cut. It could go either way,” said Curran.
“If you look ahead a year or two, Thistle could be producing up to 15,000bpd of its own crude, plus some 20,000-plus bpd from the Dons and possibly similar amounts of oil from Causeway.
“That’s quite a different proposition from the mid-1990s when BP couldn’t find anybody to buy it.”