The Brae complex is currently celebrating 25 years of production, with substantially more oil and gas recovered from the various sister fields than anyone imagined was possible when Marathon chanced upon this asset in May, 1975, while drilling well 16/07-1 – the first on licence P108.
“If you look back, people envisaged Brae lasting until maybe 1998-99,” says Mike Horgan, UK asset manager for Marathon Oil.
“Here we are in 2008 and it’s still going strong and we’re still investing for the future.
“At the start, Brae was out there on its own. … 1983. Go out there now and you can see Brae Bravo, East Brae, Tiffany, even across to Glitne and, on a good day, Sleipner; and any number of drilling rigs. From a helicopter, you can also see Scott and Nelson … a huge amount of activity.
“What it’s developed to is an incredible infrastructure … we have 28 fields tied in through Brae, both on the UK and Norwegian sides, plus some of the fields are cross-border.
“Nobody ever envisaged that something of this magnitude would be developed.”
Does that mean it got to the point where Marathon garners more revenues from third-party business than equity production? No is the answer from Horgan, but he acknowledges that the third-party business is hugely important and that the company is keen to attract more, bearing in mind that, overall, production is in decline, though the liquids side is apparently relatively “flat”.
Current output is typically around 40,000-50,000 barrels of oil per day and, last winter, gas output was up in the 330-340million cu ft per day of gas range.
The challenge for Marathon, as for most UK operators, is to slow the decline in output by seeking out new pockets of hydrocarbons, and Horgan reckons there’s a reasonable bank of those.
Moreover, they’re about to become all the clearer as, last year, Marathon shot a large seismic survey over the Brae area in order to satisfy itself that the potential for more oil and gas really exists.
“You wouldn’t make an investment like that if you didn’t think you were going to get a return,” says Horgan.
“We have a huge amount of seismic information that we need to digest and use. The whole idea is to backfill … keep production going.
“Can I give you a number for what might be out there? The answer is no. We received the processed volumes literally last month.”
However, besides shooting 3D seismic, Marathon also ran 4D seismic over a couple of specific areas and in such a way that the data can be used with existing seismic in order to build a picture of hydrocarbons migration over time within the selected structures. This will, in turn, help inform investment decision-making.
“Brae is particularly difficult in some of the Jurassic targets to see the seismic because of the rock quality. So we specifically picked two areas around the East Brae and West Brae areas,” says Horgan.
“We picked those because that’s where we thought we would get the best response from the seismic in terms of 4D. The very preliminary looks we’ve had so far suggest we’re starting to see what’s down there with greater clarity than previously.”
Brae is a large area, so how certain is Horgan that the different geologies have been fully investigated?
“Look across the whole range of Brae and there probably are some opportunities at depth. We’ve gone down from Brae B into the Sleipner formation, which is pretty deep. Start to look around West Brae and it’s actually quite shallow. We’ve got various reservoirs at various depths … have we looked at those fully? Hopefully, the seismic will tell us.”
Horgan is keen that Marathon secures further third-party business; moreover, there appears to be significant potential.
“There are still some big fields where there are investment decisions to be made by various operators. Go to the Norwegian side and there is, for example, Gudrun. On the UK side, Fairfield is looking to redevelop Crawford; also Devenick still needs developing. One could maybe even go as far north as Harding, where there’s potential as they (BP) go to gas cap blowdown.”
Horgan claims to be unconcerned that there are competitors for such opportunities and that, in any case, Marathon has an excellent track record in this regard.
Given that Brae is celebrating its silver jubilee, this means that much of the infrastructure has seen a quarter of a century of service in one of the world’s most hostile environments. That clearly begs the question as to whether the platforms are up to another dozen or so years of service.
Horgan: “We believe we’ve been investing all along and that the facilities are in pretty good shape. However, 25 years is a long time; some of the equipment is probably reaching the end of its life, and with some of it, we’ve already made investment to replace and we’ll continue to do that.
“From a company point of view, there are two things that we set out to do, and one is to run a safe and reliable business and a bunch of things come into that, including reliability and integrity of the equipment, infrastructure, and making sure we carry out the maintenance that’s needed.
“The other is people. Remember, a lot of the success of Brae is down to people. We believe we’re a people-focused company, and a lot of what we’re going to do here in terms of celebrating 25 years of success is about our people.
“Of course, there has to be delivery, but we can do that while still having a great working atmosphere, and we have a track record of delivering.”
As for whether Marathon might spring a nasty surprise by selling Brae, Horgan’s answer is: “I don’t think any company can give a firm guarantee about any asset, but we still see a lot of opportunity in the area between equity production and third-party business. There is a life for these assets going forward and we’re still committed to maximising what we can get from these assets.”