Two major new milestones for the beleaguered UK North Sea oil and gas industry have highlighted resilience in the face of a downturn.
Aberdeen-based Ithaca Energy announced yesterday it had achieved a successful start-up of production from the Stella field.
And rival operator EnQuest said the floating production, storage and offloading (FPSO) vessel for its big Kraken project had arrived on site after a long journey from Singapore.
Ithaca, which is now owned by Israel’s Delek Group following a near-£1billion takeover earlier this month, was low-key about its big news.
A brief statement from the firm said it was “pleased” about the key milestone for its Greater Stella Area (GSA) project.
It added: “Production has been started from the field and oil export to the adjacent shuttle tanker has commenced.
“The production ramp-up phase will commence when the on-going commissioning of the gas processing and compression facilities is complete.
“Further information on the status of Stella field operations will be provided when the company issues its 2016 financial results in late March.”
GSA, with estimated net proven and probable reserves totalling more than 30million barrels of oil equivalent (boe) is in the heart of the Central Graben area of the central UK North Sea.
Its licences cover the Stella and Harrier fields, which are in the process of being developed, as well as the Hurricane discovery and Twister prospect.
Plans for the joint development of the fields were approved by the UK Department of Energy and Climate Change in April 2012.
Start-up was delayed by work on the FPF-1 floating production facility modifications, carried out by Petrofac, taking much longer than expected.
Operator Ithaca, with a 54.66% stake, shares GSA ownership with Dyas (25.34%) and energy service firm Petrofac (20%).
Kraken, 81 miles east of Shetland, is one of the UK North Sea’s biggest oil prospects.
Field partners EnQuest, owning 70.5% and Cairn Energy, which has the other 29.5%, hope to exploit up to 147million barrels of oil over a period as long as 25 years.
Start-up during the second quarter of 2017 is “on track”, EnQuest said yesterday.
Kraken’s FPSO – a converted tanker – left the Keppel Offshore and Marine yard in Singapore in October and arrived on the field on Monday, with hook-up completed on Wednesday.
EnQuest chief operating officer Neil McCulloch said: “This is a significant milestone on the way to first oil.”
Mike Tholen, upstream policy director at industry body Oil and Gas UK, said progress on Stella and Kraken highlighted “the capabilities of companies investing in the North Sea”.
“Projects such as these will help contribute to a further increase in production in 2017,” Mr Tholen said, adding: “The challenge now is to sustain the growth in production over the longer term.”
An Oil and Gas Authority spokeswoman said the start-up of Stella would help to deliver the UK’s “maximising economic recovery” oil and gas strategy.