Development of Maersk Oil's Culzean Gas Field Approved by UK Authority

The UK Oil & Gas Authority approved the development of the "largest new field discovered in the UK North Sea for a decade."  

‘The Maersk Oil operated high pressure, high temperature (HPHT) Culzean field in the UK Central North Sea is expected to produce enough gas to meet 5% of total UK demand at peak production in 2020/21. Culzean is also the largest gas field sanctioned since East Brae in 1990’ reads a note released on Monday.  

Discovered in 2008 by Maersk Oil and its co-venturers, the gas condensate field has resources estimated at 250-300 million barrels of oil equivalent. Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day.

‘Maersk Oil and its co-venturers, JX Nippon and BP (Britoil) are investing around £3bn (USD 4.5 bn) in the development, with more than 50% committed to investments in the UK. Over the projected life of the field, it’s anticipated that £2.1bn (USD 3.3 bn) in operating expenditure will be spent in the UK domestic market.’

The approval of the Culzean field is coherent with the British government's commitment to increase gas-fired electricity generation. 

“Today’s announcement sends a clear signal that the North Sea is open for business. Already the UK’s oil and gas industry supports hundreds of thousands of jobs across the country and this £3 billion investment comes on the back of massive government support for the sector” Chancellor of the Exchequer George Osborne commented.

The focus on the North Sea remains despite the challenging times. 

“Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK – reflecting our commitment to the future of the North Sea region” Jakob Thomasen, CEO of Maersk Oil, said.

Last week, the Norwegian Petroleum Directorate (NPD) granted Statoil Petroleum AS a drilling permit for well 25/11-28, cf. Section 8 of the Resource Management Regulations.

‘The area in this licence consists of parts of the blocks 25/8, and 25/11. The well is being drilled south of the Grane field in the central part of the North Sea’ NPD wrote on its website.

Also Denmark expects to maintain its current production of oil and gas for the next two and a half years, the Danish Energy Agency wrote on Friday. 

The Danish Government recently opened the 7th Licensing Round for interested oil and gas companies, who are invited to submit applications to the DEA for new North Sea oil and gas licences.

‘The application period ends on 20 October 2014. The areas offered for licensing are located in the Central Graben, where the majority of Danish fields have so far been discovered, and in the areas further to the east, where oil discoveries were made in the 6th Licensing Round’ the Danish Energy Agency explained.