BP’s Shetland development contracts top £1bn

CONTRACTS worth more than £1 billion have been awarded to dozens of UK-based companies, marking a milestone in BP’s development of two North Sea oil fields.

BP believes another 450 million barrels of oil could be extracted from the fields west of Shetland. Picture: Getty

The Schiehallion and Loyal fields, to the west of Shetland, have already produced nearly 400 million barrels of oil since 1998, and the energy giant believes that a further 450 million barrels could be extracted as a result of its redevelopment plans.

In July 2011, BP and its partners outlined proposals to invest £3bn to redevelop both fields in a project known as Quad 204. The money is going into new facilities to extend production over the next two decades and possibly beyond.

The project involves two main elements – a brand new floating production, storage and offloading vessel and a major upgrade of the subsea infrastructure on the seabed.

The £1bn contracts milestone has been reached with a £65 million deal with OneSubsea to manufacture subsea “trees” at the company’s facility in Leeds.

Over the past two years, substantial contracts have also been awarded to firms based in Aberdeen, Fife, Shetland, Bristol, Leicester, Newcastle and the Wirral, among other parts of the UK.

Trevor Garlick, BP’s regional president for the North Sea, right, said “The UK-based subsea engineering industry offers great expertise and capability and is fully engaged in developing highly-advanced equipment that will ensure we maximise recovery from this field until 2035 and beyond.

“It is great to see more than 30 companies from all parts of the UK working together to contribute towards this important offshore project.”

UK Business Secretary Vince Cable said: “As I saw for myself at the Offshore Europe conference in Aberdeen last week, Britain’s oil and gas industry continues to thrive. Its expertise and innovation is impressive.

“Employing over 400,000 people and providing the majority of our energy needs, the government’s industrial strategy will help keep this important sector growing.

“An important part of the strategy is re-energising the British supply chain. I want to create the conditions for the SMEs [small- and medium-sized enterprises] across the country to flourish in a highly competitive global market.

“So it’s encouraging that the UK supply chain have played a major role in the development of BP’s Quad 204 project and I hope more will follow.”

The new vessel will be 270 metres long and able to process and export up to 130,000 barrels of oil a day and store more than a million barrels. The subsea facilities are scheduled to start production in 2016 and 25 wells are to be drilled between 2014 and 2020.

A BP spokesman said: “The Schiehallion and Loyal fields have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available, more than was originally thought.”