Venture Production (North Sea Developments) Limited, the Aberdeen based UK independent oil and gas production company on behalf of itself and its partners, Bow Valley Petroleum (UK) Limited and Atlantic Petroleum UK Limited, has entered into a Letter of Intent with Sevan Marine ASA for the use of Sevan’s floating production unit SSP 300 FPSO on the Chestnut field in the central UK North Sea, in a water depth of about 120 m.
The Chestnut field is the first of three discoveries, in which Atlantic Petroleum participates, that is being developed. But also the development of the Perth field is getting closer. The Chestnut field is expected to produces its first oil in 2007
“With todays event, Atlantic Petroleum takes a step closer to becoming an upstream oil producer. Wilhelm Petersen, the company's Managing Director, said "We are convinced that the partnership has selected the right option for a safe and cost effective development of a field that by yesterday's standards was marginally economic. The innovative technology employed should provide the group with a good return on its investment and allow the United Kingdom to capture rent that would otherwise have stayed in the ground. This also underlines our position as an active partner in a consortia seeking innovative solutions to developing small oil and gas fields profitably."
The Sevan SSP development solution is significantly less capital intensive than either a sub-sea tieback to a nearby host platform or a conventional ship shaped FPSO. The Sevan SSP offers a simple, re-usable, costeffective solution which has the potential to lower the economic threshold for economic development of ‘stranded’ oil fields in the North Sea. A number of ‘stranded’ oil fields in the North Sea could become economically interesting by making use of the cost-effective Sevan SSP development solution thus extending the oil reserves in the North Sea.
The Chestnut field is being developed with reserves of between 7 and 15 million barrels and as such this will be one of the smallest stand alone field developments in the North Sea.
The Chestnut SSP is the second unit contracted by Sevan Marine this year, as the Company has already signed an 11-year contract with the Brazilian oil company Petrobras S.A. for the provision of one SSP 300 to the Piranema field, with first oil expected mid-2006.
“The agreement with Venture demonstrates the versatility of the SSP design. The North Sea has a number of small and medium sized fields that require innovative stand-alone development solutions, and the SSP technology provides a viable technical and economical solution for those fields,” says Jan Erik Tveteraas, CEO of Sevan Marine ASA.
The fixed term of the charter contract is 30 months, with extension options for an additional 24 months. The SSP 300 FPSO will be installed on the Chestnut field during the first half of 2007 with first oil following hook-up of wells to the facility. Plateau production from the field is expected to be around 10,000 bopd.
The contract value for the fixed term is approximately USD 64 million, excluding the value of any operational services to be performed by Sevan Marine. The SSP 300 FPSO will be equipped with a process plant capacity of 30,000 barrels of oil per day, a water injection plant with a capacity of 20,000 barrels per day and an oil storage capacity of 300,000 barrels.
