First oil recovered from redeveloped field near Shetland

The first oil from a redeveloped field has been unlocked following the completion of the multi-billion-pound project west of Shetland.

Shetland oil find 2017

Schiehallion and the adjacent Loyal fields were first developed in the mid-1990s and have produced nearly 400 million barrels of oil since production started in 1998.

After reintroducing the Schiehallion field through the Quad 204 project, BP and co-venturers Shell and Siccar Point Energy expect it to retrieve an estimated 450 million barrels of oil, which will extend the life of the field to 2035 and beyond.

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Production will increase through the remainder of this year to a plateau level of 130,000 barrels of oil per day.

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North Sea oil revenue turns negative for the first time

BP hopes to increase its UK North Sea production to 200,000 barrels of oil a day by 2020 and sustain business in the region for several decades.

Production from the new Clair Ridge project is expected to begin next year.

Over the next 18 months, the oil firm’s plans involve up to five exploration wells in the UK and drilling 50 development wells over the next three to four years.

BP group chief executive Bob Dudley said: “The start of production from Quad 204, one of the largest recent investments in the UK, is an important milestone for BP, marking a return to growth for our North Sea business.

“As one of the series of important, higher-margin major projects that are now steadily coming on line for BP, it also underpins our expectation for growing production and cash flows from our upstream business over the coming few years.”

Mark Thomas, regional president for BP’s North Sea business, said: “In safely delivering first oil from the Quad 204 project, we have succeeded in one of the largest ever UK mid-life offshore redevelopments.

“BP has developed a strong track record of finding, developing and operating big offshore oil resources west of Shetland - we have and will continue to use the latest technology to maximise recovery from the Schiehallion area.”

The announcement was welcomed by the industry’s trade body.

Deirdre Michie, chief executive of Oil & Gas UK, said: “This is excellent news and another positive endorsement of the potential the UK Continental Shelf still offers with the right investment.

“It’s also extremely heartening to see one of the original explorers of the basin using new, ambitious approaches and pioneering technology to help lead a revival in production.

“As well as being a welcome boost for the hard-pressed supply chain, the announcement from BP and co-venturers Shell and Siccar Point Energy proves that our faith in the long term health of the basin is well-founded. “