Dana Petroleum’s Western Isles development is due to be shut down eight years earlier then scheduled, as plans are greenlit by regulator OPRED.
When Western Isles started up in 2017, Dana said it expected 15+ years of production.
However, under plans submitted to OPRED and confirmed by Dana, the project is expected to shut down “on or around” March 31, 2024.
Dana Petroleum told Energy Voice that the reason for decommissioning Western Isles was forecasts showed the project would become “uneconomic next year.”
Aberdeen-based NEO Energy, which holds a 23.08% stake said it has taken a $77.3m impairment on the project “driven primarily by a reduction to the expected life of the field”.
The Dana-operated Western Isles Project is the development of two discovered oil fields called Harris and Barra in the northern North Sea, around 99 miles east of the Shetlands and 7 miles west of Tern field.
The UK Government first gave approval for the project back in December 2012.
However, the date for expected first oil was pushed back after it emerged that the price of the project had reached £1.4 billion.
Dana filed a draft decommissioning programme with the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) at the beginning of 2023 which has now been approved.
The firm said: “Forecasts indicate that the field will become uneconomic next year. The decision has been subject to rigorous scrutiny by the relevant authorities who approved the conclusion of the partners.”
‘Suitable for reuse’ Western Isles FPSO
The “suitable for reuse” Western Isles FPSO faces potential decommissioning if it does not find more work.
Designed by Sevan SSP, the Western Isles FPSO was constructed by COSCO Shipyard in China with production brought online in 2017.
Featuring a 70m hull and storage capacity for up to 400,000 barrels of oil, it produced from the Harris and Barra fields in the around 100 miles east of Shetland in the northern North Sea.
Dana, the firm that owns 77% of the vessel, says: “The FPSO is not required to perform any further decommissioning related activities on the subsea infrastructure after completion of the decommissioning activities.”
Dana says: “The FPSO is suitable for reuse and is not needed for decommissioning activities within the field so it will be removed from station.”
There may be a reuse option for the FPSO, which has a 20-year design life.
Dana reports: “The FPSO will be disconnected from its mooring system and risers.
“Following disconnection, the FPSO will be towed to shore for potential reuse, subject to evaluation of reuse options.
Dana explains that if the Wester Isles vessel is not reused it “will be recycled or disposed of, whether in the UK or elsewhere” in order to comply with UK law “or any other jurisdiction in which the FPSO vessel is to be recycled or disposed of.”
However, if a reuse option is identified, the UK regulator OPRED “will be advised as part of the post-decommissioning approval process reporting regime,” the vessel operator says.
Dana adds: “Should no reuse option be identified OPRED will be advised on the fate of the vessel.”