Beatrice's second wind

Published on Saturday 3 October 2009 13:37

A DOZEN miles from the Caithness coast, the ageing and rusting Beatrice Alpha oil rig is showing its age. For 30 years, it has withstood the ravages of the North Sea and its fierce north-easterly winds.

Now Beatrice, together with surrounding installations, near Wick in the Moray Firth, is enjoying a new lease of life.

The rig, currently owned by Ithaca Energy but whose day-to-day running has passed to the Scottish oil services firm Wood Group, appears almost to have developed a life of its own.

"If you ask the guys who they are loyal to, Wood Group or Ithaca, they all say Beatrice," says Paul Bradley, the rig's installation manager, who celebrated a year in the job on Friday.

"Many of the staff have been here for many years and, down the line, the changes, including the latest from Talisman to Ithaca, hasn't changed their enthusiasm."

Aim-listed Ithaca took on the lease for Beatrice from Talisman last November, and it is the company's only currently producing asset.

Already the group, registered in Calgary, Canada, but operating exclusively in Scotland, has breathed life into the platform's production, as smaller companies seek to squeeze out the remaining reserves that have been abandoned by the majors in their search for bigger prizes elsewhere around the globe.

It is a key feature of the changing nature of the North Sea that many small firms believe they can make a sizeable return from what is left of the region's oil by applying new technologies. There is also a new industry sprouting up, as wind and wave projects become more viable.

Talisman gave up Beatrice, then producing only a few thousand barrels a day, after electing not to develop the nearby Jacky oil field. Geologists at the group deemed Jacky too high a risk to proceed with, considering its estimated recoverable reserves were just three million barrels, thus casting Beatrice's future into doubt.

Ithaca took on the project, and Jacky is now producing up to 13,500 barrels a day, more than 80 per cent of Beatrice's total production. Ithaca believes the recoverable reserves from the new field could be at least double initial estimates.

Ithaca, with a business model of exploration as well as developing discoveries which larger companies believe are not worthwhile, looks a likely candidate to move into a gap in the North Sea left by Venture Production, a much larger "stranded asset" exploiter, taken over by Centrica for 1.3 billion during the summer.

Little has been wasted on cosmetics along the way – the Beatrice rig is still emblazoned with the Talisman Energy logo. Simply on grounds of cost, Ithaca has no plans to change it.

Chris Bain, an offshore team leader, overseeing rescue boats on the rig, has worked on Beatrice for "only" 11 years. "I'm still a newbie", says Bain, adding that, on a very clear night, he can see all the way from the platform to Fraserburgh, his home town. A number of staff, many of whom came from the North-east of England as heavy industry declined in the 1970s, have been working on the rig since it opened in 1979, and will probably be there until it is eventually decommissioned.

Ithaca's chief development officer, John Woods, reckons Beatrice has five years left in her yet, but if new fields nearby can be brought on stream, possibly longer. "We reckon about 2017 it might start getting a little harder to manage," Woods says, as he surveys the area, with the newer unmanned Beatrice Beta and Charlie platforms nearby.

Woods, who joined the group shortly before its flotation in 2006, hopes the company can replicate its success at Beatrice, with Ithaca "actively examining" deals to expand and diversify around the North Sea.

But standing on Beatrice Alpha, the eye is drawn, not to the other oil rigs, but to two massive wind turbines, just a couple of miles away, which are likely to represent the industry's best hope of a long-term future once oil is gone.

"No matter where you go in the world, any wind conference, anywhere, you see pictures of these," says Allan MacAskill, one of the key figures behind the Beatrice demonstrator turbines.

MacAskill was part of the team that designed and built the demonstrator turbines, a joint venture between Talisman and Scottish & Southern Energy. The turbines now provide the Beatrice platform with up to 10 megawatts of electricity, when there is enough wind and demand.

They sit in more than 40 metres of water -with the tips of the blades reaching 150 metres about the surface, making it a unique deep-water project. At full speed, the tips of the blades travel at more than 200 miles per hour.

A cynic might say the ?41 million project was simply Talisman looking for a trophy to give it a much-needed public relations boost, after the Canadian company was dogged for years over its operations in Sudan, where it operated during a civil war, working alongside a government accused of war crimes.

Talisman still owns the turbines, although it apparently has no desire to build more, a decision made even before MacAskill and his team left the company.

Whatever the motivation, the project has provided a step forward for deep-water wind farms, and could perhaps play a key role growing a services industry for the sector in Scotland. Certainly, Jim Murphy, secretary of state for Scotland, who joined the media party for the visit, was in awe of the project, declaring wind energy "the future for Scotland".

MacAskill, and his colleagues who ran the project, have since been poached to work for Aberdeen-based SeaEnergy, which could produce the mega turbines on a massive scale for major wind farms, so far enough out to sea as not to offend.

Initially a subsidiary of Ramco Energy, the Aberdeen-based oil and gas company run by the charismatic American Steve Remp, SeaEnergy is effectively becoming the whole company, with Ramco announcing a change of name and direction last month, boasting it is now the only "pure play" listed offshore wind farm group.

SeaEnergy has big plans. Just 15 miles to the north of the two Beatrice turbines, it plans to install up to another 184 turbines – in a joint Scottish and Southern Energy venture – with the planned Beatrice wind farm generating at least 920 megawatts at peak. Inchcape, another similarly sized project, is planned in the firth of Tay, as a joint venture with German RWE.

SeaEnergy is applying for more sites to develop in the UK, and is thought to be actively seeking more projects in the Middle East and Asia.

While the actual turbines and blades of the Beatrice demonstrator turbines are German, the jackets and piles, the essential elements for such deep water, were made in Scotland.

MacAskill says the service industry for wind farms could be massive, at a time of uncertainty for the oil sector.

"A lot of the skills from the oil industry are transferable to offshore wind," MacAskill says. "Some of the oil service companies are already looking at how much will be spent on oil and how much on wind and asking, where's the future?"