UK, Norwegian Operators Defer Almost All 2020 FIDs
The outlook for the Norwegian and UK offshore zones looks bleak, with almost all final investment decisions (FIDs) scheduled for this year having been deferred as a result of the market collapse.
Prior to the Covid-19 pandemic, Oslo-based Rystad Energy tells NGW it expected 14 projects to be approved on the UK shelf this year. Apache signed off on developing the Gair field in the northern North Sea before the market crisis. But decisions on the remaining 13 have all been delayed.
FIDs were scheduled at a further nine projects off the coast of Norway. Similarly, decisions at all but one project, Var Energi’s Balder X, have been pushed back.
UK
Apache and its partner Chrysaor are targeting first oil at Gair in the fourth quarter of 2020. The field is projected to peak at around 8,000 b/d of oil and 294,000 m3/d of gas next year. Apache submitted an environmental statement for the project to authorities in March, marking a key step in the regulatory approvals process. Gail is due to be tied back to the Buckland field connected with the Apache-operated Beryl Alpha platform.
Those projects that have been deferred are BP's Skua redevelopment at Murlach and the Andrew Lower Cretaceous development (due to be acquired by Premier Oil under a deal signed in January, which is now caught up in a legal wrangle); Total’s Glendronach Phase 1; Chrysaor’s Talbot; Spirit Energy’s Pegasus West; KNOC’s Platypus; Ping Petroleum’s Avalon; Delek’s Captain EOR Phase 2; Premier Oil’s Tolmount East; Parkmead Group’s Perth; Shell’s Jackdaw; Siccar Point Energy’s Cambo Phase 1; and Ineos’ Breagh Phase 2.
Norway
Var Energi, majority-owned by Eni, effectively greenlit Balder X in December, but is waiting on Norwegian authorities to approve its development plan, after which point an FID will be formally taken. The $1.7bn project aims to redevelop the Balder and Ringhorne fields in the Norwegian North Sea, in order to extend their production lives and recover an extra 170mn barrels of oil.
The deferrals are Equinor’s Breidablikk, Valemon North and Heidrun Phase 2 projects, Aker BP’s Frog, Gekko, Trine/Trell and Hod projects, and Okea’s Grevling field.