PROMINENT oil and gas firms have underlined their confidence in the exploration potential of the North Sea in spite of renewed signs the crude price plunge could drag on.
Norwegian giant Statoil said it was preparing to start an exciting drilling campaign in UK waters which could result in the company finding more oil by the giant Mariner discovery East of Shetland and developing at least one new field.
The company highlighted the scale of Mariner yesterday, noting that work on installing the production facilities for the field will support around 1,500 jobs ahead of first oil next year.
Statoil said the first of the three wells it will drill in coming weeks could prove additional resources and increase the extent of Mariner.
The field is estimated to contain 250 million barrels and is expected to be in production for 30 years.
The rig that will be used on Mariner will go on to drill wells on what Statoil described as the under-explored margins of the Viking Graben East of Shetland and in the outer Moray Firth.
Head of UK exploration Jenny Morris said: “This is an exciting campaign … We hope to make discoveries that can add value to existing projects and also provide the resources necessary for new developments on the United Kingdom Continental Shelf.”
Meanwhile, Aberdeen-based Faroe Petroluem said a well to assess the Brasse discovery that it made last year off Norway had flowed high quality crude at strong rates.
Chief executive Graham Stewart said the results underlined the potential of the Brasse area and validated the company’s decision to take the risk of carrying on potentially high risk exploration activity amid what looks set to be a long period of low oil prices.
Brent crude has come under fresh pressure in recent weeks as traders worried about the effectiveness of efforts by Opec members to curb production to support the market.
It sold for around $49.20 per barrel yesterday compared with $56/bbl in April.
Faroe has limited recent exploration activity to the Norwegian sector of the North Sea, in which more generous tax breaks are on offer for exploration than in the UK.
Exploration firm can recover 78 per cent of the costs of drilling wells off Norway from the government.
Faroe is pursuing an active drilling programme off Norway but has no plans to drill any wells in the UK North Sea.
However, Faroe has said it is interested in acquiring more production in the UK.
The company has tax losses that it could offset against UK oil and gas revenues.
Faroe said the results of the Brasse appraisal well provided clear evidence of a highly prolific reservoir and excellent quality oil-bearing sands.
The well flowed at up to 6,187 barrels oil per day.
The company plans to drill a side track well to help confirm the extent of the reservoir.
It has estimated that up to 80 million barrels oil equivalent may be recoverable from Brasse, but may update that number after the side track well.
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