Dana announces Babbage gas start-up

ABERDEEN-BASED oil and gas operator Dana Petroleum said yesterday that gas production had begun at the Babbage field in block 48/2a in the UK southern North Sea.

The company, which has a 40% interest in Babbage, said the development was being executed in two phases with total investment to be about £300million.

Phase one has included the installation of the Babbage platform last September, the drilling of three production wells and the laying of a 17.4-mile pipeline to connect the field to UK gas infrastructure. Two further wells are planned for phase two next year. Following the completion of phase two, Babbage is expected to produce at rates of up to 70million cubic feet of gas per day; around 11,666 barrels of oil equivalent per day (boepd) with about 4,666boepd net to Dana.

The field is expected to produce more than 176.6billion cu ft of natural gas, with a life of 20 years.

Partners are operator EON Ruhrgas, 47%, and Centrica, 13%.

Dana chief executive Tom Cross said: “The start of production at Babbage adds further value to the Dana Group and achieves another of Dana’s key targets for 2010.

“The group now produces oil and gas from . . . 37 fields and expects to very shortly complete the acquisition of Petro-Canada Netherlands, which will significantly increase Dana’s operating capability and production base in the North Sea.”

Dana is the subject of a potential £1.7billion bid from Korea National Oil Corporation, and is understood to have had talks with the Korean state-owned oil company. Dana said yesterday it had no comment to make.

Houston-based Apache said yesterday it had completed the acquisition of BP’s oil and gas operations, acreage and infrastructure in the Permian Basin of west Texas and New Mexico.

Apache added that it was paying £1.98billion for the assets.

BP will continue to operate the properties on Apache’s behalf until November 30.