Canadian energy group Nexen said yesterday the Buzzard field it operates in the outer Moray Firth was consistently exceeding expectations for production.
Nexen said it had overcome the start-up issues that hampered early output to achieve gross production of 212,000 barrels of oil equivalent per day (boepd) during the first quarter of 2008, compared with 174,000 boepd during the final three months of 2007.
The Calgary-based firm added: “Facility performance is now consistently exceeding our original design expectations.”
Scheduled maintenance work in the second and third quarters of 2008 is expected to reduce production volume slightly from the first three months of the year.
Nexen, which owns a 43.2% stake in Buzzard, said the shutdown of the Forties pipeline as a result of the ongoing industrial dispute at the Grangemouth refinery would also affect production in the current quarter.
The firm said its North Sea Ettrick development, for which it will employ a leased floating production, storage and offloading vessel (FPSO), designed to handle 30,000 barrels of oil and 35million cubic feet of gas per day, was progressing towards first oil in the second half of 2008.
Construction of the FPSO is nearly complete and sea trials are expected to commence in the middle of the year.
Nexen added: “We have also identified a number of exploration opportunities in the immediate area that could be future tiebacks to Ettrick.”
One of these opportunities, Blackbird, was spudded recently and Nexen plans to drill another later this year.
“We plan to drill six exploration wells in total in the UK North Sea before year end,” said Nexen, which operates and has an 80% working interest in both Ettrick and Blackbird. The firm added: “Our North Sea strategy is to grow our production, with exploration and exploitation opportunities near existing infrastructure.
“We have a number of satellite discoveries near our Buzzard, Scott/Telford, Ettrick and third party facilities that in aggregate have sizeable potential. We are currently assessing development options for these discoveries.”
Announcing record quarterly earnings of £315million, up 421% from a year earlier, Nexen said: “Buzzard generated excellent returns from strong volumes and high cash margins.”
Buzzard was the largest UK North Sea find for many years when it was discovered in 2001. Production from the field got under way at the start of last year.
Petro-Canada, which also has a large stake in Buzzard and other interests in the North Sea, said yesterday its first-quarter profits jumped 82% to £540million, helped by soaring oil prices and the settlement of a derivative contract late last year.