BP has started production from the giant Clair Ridge project West of Shetland in a landmark development the firm said underlined its commitment to the North Sea region.
The start of production follows a $4.5 billion investment programme completed in harsh operating conditions which was one of the biggest on the United Kingdom Continental Shelf for years.
Read more: West of Shetland in focus for BP after oil giant quadruples profits
BP expects Clair Ridge to recover 640 million barrels with production set to last for decades.
Industry leaders noted the potential to extract huge quantities of additional reserves from the Clair field through other projects, with BP and partners already mulling another development phase.
The start of production from the project will boost hopes other developments in the frontier area West of Shetland could unlock billions of barrels oil and gas and help the industry recover from the deep downturn triggered by the crude price plunge.
Oil & Gas UK chief executive Deirdre Michie said first oil at Clair Ridge was a major step forward in BP’s campaign West of Shetland, which she described as “the frontier region which is likely to have the greatest potential to expand current UK production”.
The start of production from Clair Ridge was an important step towards maximising the recovery of the reserves in the wider North Sea area.
“It’s greatly encouraging to see one of the basin’s original explorers using new, ambitious approaches and pioneering technology to help lead a revival in production,” added Ms Michie.
The comments highlight how advances in technology have encouraged oil and gas firms to develop fields West of Shetland that were long thought to be too challenging to be commercially viable.
BP discovered the Clair field in 1977 but only started production from the 300m barrel first phase in 2005 in an effort the company said involved leveraging its technology and ingenuity.
Read more: At nearly 30 Clair's time has come
The head of its Upstream exploration and production arm, Bernard Looney, said the start-up of Clair Ridge was a culmination of decades of persistence.
He added: “This is a major milestone for our Upstream business and highlights BP’s continued commitment to the North Sea region.”
Clair Ridge is the first project completed using low salt technology BP developed to make it easier to flush oil out of reservoirs.
The company developed two huge production platforms and laid miles of subsea pipelines to take output from Clair Ridge for processing at the Sullom Voe terminal on Shetland.
These could be used to help bring other fields in the area into production.
West of Shetland has remained relatively under-explored compared to parts of the North Sea close to the UK mainland partly because a lack of production facilities in the area has put firms off drilling.
Read more: Bumper gas find stokes excitement about West of Shetland frontier
Ariel Flores, regional president for BP’s North Sea business, said: “Safely delivering first oil from Clair Ridge, in some of the harshest conditions in the United Kingdom Continental Shelf, is the result of years of planning and hard work by BP, our partners and supply chain colleagues.
“We are proud to have played our part in this pioneering project and are excited for the Clair region’s continued potential.”
BP noted Clair is estimated to contain seven billion barrels oil and gas.
With the Clair Ridge facilities designed for 40 years of production the project could make a big contribution to BP’s profits for years to come.
Directors have highlighted the profitability of such large scale projects, on which the company can take advantage of scale economies and advances in technology to achieve high margins.
Production from Clair Ridge is expected to peak at 120,000 barrels daily.
BP maintained investment in Clair Ridge despite shrinking its North Sea operations and shedding around 600 jobs in the region in response to the crude price plunge from 2014 to 2016.
Clair Ridge has provided plenty of work for the UK oil and gas supply chain since it was approved in 2011. This was prized amid the downturn, as work on other fields dried up.
Some 6,000 people worked on the commissioning phase.
The head of the Oil and Gas Authority regulator Andy Samuel highlighted “significant scope for further phases of development” on Clair.
BP operates Clair with a 28.6% interest with Shell on 28%. America’s ConocoPhillips and Chevron have 24% and 19.4% respectively. BP is in the process of acquiring a 16.5% interest in Clair from ConocoPhillips.
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