BP has upped its interest in a North Sea development, in defiance of the “challenging time” currently being experienced by the industry.
The oil giant has purchased an additional 16 per cent interest in the Culzean development in the UK Central North Sea from Japan’s JX Nippon.
BP is currently in the half way through a five-year, £7bn investment programme in the North Sea region, which been notably rough recently.
The deal expands BP’s interest in the gas condensate field, which has gathered resources estimated at 250-300 million barrels of oil equivalent since it was found in 2008. Production is anticipated to begin in 2019 through to the 2030s, with plateau production of 60k-90k barrels of oil equivalent each day.
“This is a challenging time for the industry and we must continue to work together to ensure that when developments like Culzean, or other projects such as BP’s Quad 204 and Clair Ridge, come online they can be run as efficiently as possible.” Said BP’s president of the North Sea region Mark Thomas.
BP believe the Maersk-operated Culzean field development is expected to produce enough gas to meet five per cent of the UK’s overall demand at peak production in 2020/21.
“BP has been focusing and refreshing its North Sea portfolio by bringing new fields into production, redeveloping and renewing existing producing facilities and divesting some of its more mature or less strategic assets…
“Our deepening in Culzean further demonstrates our commitment to supporting the development of another UK field for the future.” Thomas added.
BP’s annual report published in March this year reported annual losses attributed to shareholders at $6.5bn, down from the $3.8bn profits recorded in 2014. It also emerged that the profitability of the North Sea oil sector is at the lowest level since 1997.
According to the Office for National Statistics, UK Continental Shelf firms’ rate of return on investments fell from 1.9 per cent in the third quarter of last year, to 0.6 per cent in the last quarter of 2015.
Shares in BP rose 2.35p to 364.85p in early London trading.
