Analysis
By Mark Williamson
WHILE champions of the North Sea oil and gas industry will take heart from the recent achievements of Premier Oil its experience highlights the challenges firms can face in one area that has generated huge excitement.
Premier has been rewarded for its decision to carry on investing in the North Sea amid the oil price plunge that prompted many peers to retrench in the area.
The bumper Catcher development east of Aberdeen has been a huge success with Premier recovering its cash outlay 22 months after starting production from the field.
North Sea fields help oil and gas stalwart generate huge amounts of cash
Modern technology used on Catcher combined with the scale of the field is helping Premier limit operating costs to around $12 per barrel. As Brent crude is selling for around $63/bbl plus the firm’s output is very profitable.
With the costs of support services well down on the highs reached during the boom, Catcher may inspire other firms to develop North Sea finds.
Premier has also shown that investing in mature North Sea fields can make good commercial sense.
Israeli oil firm underlines faith in North Sea after $2bn expansion move
But its experience on the relatively under-explored West of Shetland frontier has not been a happy one.
Premier started production from the Solan field in 2016 after facing big challenges. Output has averaged 3,600 barrels daily recently, compared with the 20,000 once expected..
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here