Located in late 1970 and brought onstream 40 years ago, Forties was the first major oil discovery made on the UK Continental Shelf, not counting the Arbroath field discovered in 1969, which was also a BP prize, though not developed until the 1990s.
The major had been pursuing the North Sea oil & gas prize since the earliest days of the UKCS. Moreover, much of the early work was carried out using the semi-submersible rig Sea Quest, built for the company in Belfast and delivered in 1966.
Whilst the company had done very well in the Southern North Sea with gas discoveries, neither it nor competitors had struck oil. Nor would they until the hunt shifted to the Central North Sea.
BP decided to take a punt on its block 21/10 acreage (licence P246) in 1970 with the Sea Quest, which quickly encountered high-grade crude at 3,400m (11,000ft) in Upper Tertiary sandstone.
BP records show that George Pemberton was the first member of the Sea Quest’s drill floor crew to see traces of Forties crude in the drilling mud.
Check the government’s so-called Brown Book … the North Sea annual … and the record says Forties was discovered in November 1970 with well 21/10-1.
And yet BP announced on October 7 1970 that it had struck oil 110 miles ENE of Aberdeen in 110m (350ft) of water. It was dubbed Forties in recognition of the weather forecast sea area so familiar to North Sea mariners.
Four appraisal wells drilled during 1971–1972 revealed a large reservoir at a depth of about 2,100m (7,000ft) and closure of 155m.
The Press and Journal, covered the Forties find in block 21/10 early one damp November evening when samples from the field arrived at an old hanger in Aberdeen Airport.
At the time, BP heavily underplayed the size of Forties in a deliberate attempt to gain advantage over canny East Coast Scottish farmers as it sought to negotiate a pipeline route from the Buchan corner to Grangemouth on the south side of the Firth of Forth.
The company was able to keep the lid on the scale of Forties until December 1971 at a meeting in London when Alistair MacLeod Matthews of BP announced the size of the discovery … around 2billion barrels.
Oil prices were in the basement at the time and questions were asked as to whether the high cost of extracting crude, even from finds such as Forties could be justified.
But the situation changed rapidly in favour of the North Sea after October 6, 1973 when Egypt invaded Israel, starting the Yom Kippur War. OPEC, by then 13 years old, sought to limit oil supplies to the West.
Prices increased fourfold in just three months. Security of supply became a major issue for Britain and this, coupled with dramatically higher oil prices, created the real launch pad for development of fields like Forties.
Knowing it had a huge discovery, BP got moving on the development of Forties very quickly. This would a development on a scale that had never ever been attempted.
It would require four platforms and an export pipeline to a receiving terminal at Cruden Bay, 20 or so miles north of Aberdeen, plus a trunk-line to refinery facilities on the Firth of Forth. There was massive pressure from the then Labour government to get the oil flowing as fast as possible owning to the parlous state of the British economy.
The Press and Journal’s first reporter to specialise in oil & gas, Ted Strachan, neatly encapsulated the Granite City’s early 70s position in the paper’s Years of Discovery supplements of April 1989.
He wrote then that, if BP’s Forties find was big enough, then the company would doubtless have its refineries at Grangemouth in mind.
This meant Aberdeen might become just a staging post for a pipeline from the North Sea to the Central Belt. He pointed out that the city largely had the right mentality – a port well-used to the “time is money” needs of the fishing industry and therefore surely able to adjust to the “wanted yesterday” needs of the oil industry.
Notwithstanding local political difficulties in Aberdeen or anywhere else, BP got on with the task of bringing Forties oil ashore, but had to secure the biggest private financing deal ever arranged in Britain via a mix of sterling and dollars from an international syndicate of banks which put up £180million and $468million to cover projects costs.
In effect, BP had found the necessary money through what would today probably be regarded as a PFI (Public Finance Initiative) scheme.
According to renewled petroleum economist Professor Alex Kemp of Aberdeen University, what actually happened with the Forties loan was ingenious back in 1972.
Recalling this episode in newly published ABZ and Big Oil, he said the security for the loan as far as the banks were concerned became production throughput.
The oil companies were able to claim title to the oil at the wellhead. Collateral based on production is different to collateral based on reserves; it involves greater risk. The Forties loan was based on a barrel price of $2.50.
“From memory, it was going to be repaid in seven or eight years from first production,” said Kemp.
“Then came the Yom Kippur War, the 400% increase in the oil price and, again from memory, the loan was repaid in 18 months. That illustrates the transformation that took place.
“If the price had remained in the range $2.50 to $4, the economics of the early fields would have been difficult because there were very serious cost overruns in the mid-70s.”
Anyway, funds secured, BP got on with the job, albeit not fast enough to claim the crown as first UK oil producer.
That went to the oil junior Hamilton, a company established by two Canadian brothers. They pipped BP with the Argyll field, bringing it onstream in June 1975, utilising the North Sea’s first floating production system … formerly a semi-submersible drilling rig.
The first tanker load ever of UK North Sea crude started discharging to a Thameside refinery, on June 18, with the then Secretary of State of Energy, Anthony Wedgewood Benn turning the valve that allowed oil to flow ashore.
Wood Mackenzie Consultants has said since that BP could have brought Forties onstream in 1974, but for the lack of an adequate contracting sector coupled to sheer inexperience in building super-platforms for an “elephant” class field.
To quote the Brown Book of 2001 (the last edition printed), Forties then held gross estimated reserves originally present comprising 347.42million tonnes of oil, 12.31million tonnes of liquids and 2.99million cu.m of gas.
Back in 1977, Forties was said to hold 220million tonnes. The differences can be attributed quite simply to reservoir knowledge improving over time.
Most main infrastructure orders were placed in 1971, including fabrication of the Forties pipeline to Cruden Bay.
Of the four platforms, Laing at Graythorpe on the Tees got two jackets, while Highlands Fabricators on the Cromarty Firth secured the other two. Topsides modules were built in various locations including in Holland.
At 19,800 tonnes, Forties Charlie, or Highland One as it was initially known, was the first of the giant jackets built for the North Sea and was completed in 1974, though first of the four monsters to be installed was Graythorp 1.
Such was the strategic importance of Forties to the British economy that even the Royals were taking a keen interest, as the following shows.
In August 1974, BP announced in a message passed to the Queen, then cruising on board the Royal Yacht Britannia that the first platform jacket – Graythorp 1 – had been successfully installed and that Highland One would shortly be floated out from Hi-Fab at Nigg.
Eight weeks later, in mid-October, the 1.750-tonne Dutch-built deck of Graythorp 1 was installed using the then largest floating crane Thor. Contractor Brown & Root had hoped the task would have been completed in September, but three weeks of bad weather halted work.
In those days, platforms were pieced together offshore “Lego-style”. Graythorp 1 had five main modules and it took until early November to get the last phase one package swung into place by contractors determined not to let the weather beat them.
Forties’ operator puts it succinctly in a press release dated November 8, 1974: “BP wins first stage of North Sea winter battle”.
It continued: “Drilling from Graythorp I is now scheduled to start in February next year, with initial production of 50,000 barrels a day flowing by late summer.”
That was to prove overly ambitious and drilling in fact did not get going until June, with first oil expected in the autumn … an event which was to be of immense importance to Britain, and Aberdeen in particular. Indeed, commercial production is noted in the Brown Book as starting in September 1975, with output gradually ramped up as systems settled into their stride.
But it was the Queen who honoured BP and the North-east of Scotland by formally initiating the flow of oil from the North Sea giant Forties to the refinery complex at Grangemouth on the Forth. The date was November 3 1975. The location was BP’s Dyce complex.
In some respects, her words were far sighted in that she talked about what we today would describe as technology transfer.
“What has been achieved in the North Sea can be done on other Continental shelves and, no doubt, seen in very much deeper seas,” said the Queen.
“I am sure that British experience and expertise gained off our coasts will have a key role to play in developing this new offshore industry, wherever oil and gas are found.”
When BP developed the Forties field, the costs were staggering and said to climb past the £1billion mark.
The pay-back time was equally staggering; a lot quicker than expected, as noted earlier in this feature.
Former BP geologist, Mike Shepherd, who worked on Forties for a spell, recounts in his recently published book Oil Strike North Sea: “In the first few years after first oil was produced from the field in 1975, there was a drive to get the development wells drilled as fast as possible to repay the money borrowed from the banks.
“The more oil produced meant the quicker the bank loan could be paid back. Once this happened, the field would make massive profits for the company (minus the large amount of tax paid to the government).
“By the time I worked for the company this was already happening, as the loan had been paid off by the end of 1977.
“One day in the office as a break from the relentless pressure of planning wells, I got my calculator out to work out how much production from the field was needed to pay my annual salary.
“At a field production rate of 450,000 barrels per day and with the oil price approaching $35 a barrel, I had reckoned this wouldn’t take long.
“About a minute’s worth of production was the answer.”
And the rest, they say, is history.