Oil & Gas UK Economic Report 2014

BP in Shetland Shetland, both onshore and offshore, continues to be a major area of development for BP. To the west lie some of the most significant remaining opportunities on the UKCS, estimated to hold potentially 3-4 billion boe. BP has led the way in exploring WoS and, at present, it is the only operator in the area. Innovation, effective co-operation and the smart application of both new and existing technologies will be essential to push the boundaries of what is possible in the harsh environment found WoS, if the maximum economic recovery of oil and gas is to be achieved. BP and its partners are investing heavily in both existing assets and major new fields to realise and secure that potential. BP first explored WoS in the 1970s and its Foinaven oilfield was the first of the deep water fields to be developed. It was discovered in 1992 and production began five years later. Because of a water depth of 350m, a floating, production, storage and offloading (FPSO) vessel was required, while the location’s remoteness meant offloading the oil into tankers. A pioneering development, Foinaven continues to be among BP’s top-producing UKCS fields. The Schiehallion field was discovered in 1993, 175 kilometres (km) WoS. The following year, the adjacent Loyal field was found and, in 1995, extended well tests demonstrated oil flows up to 20,000 barrels per day (bpd). BP estimated that the two fields contained a combined recoverable total of 350-500 mboe (predominantly oil). ground-breaking development and delivered a number of firsts for the company. It was BP’s deepest Foinaven, Schiehallion and Quad204 – A World of Firsts Schiehallion was a

field development, used its first purpose- built FPSO and had the shortest build cycle. At 246m long, 45m wide and 150,000 tonnes in weight, this steel giant was the world’s largest vessel of its type, capable of storing 950,000 bbls and moored to the seabed by the biggest turret ever installed on an FPSO. The barge-shaped vessel was built to cope with the harsh conditions of the Atlantic Ocean, operating in waves of up to 38m (125 feet) high, winds of up to 100 knots and strong currents, all the while producing an average of 120,000 bpd. Throughout the Schiehallion field’s life, 4D seismic surveys have been crucial for reservoir surveillance. When analysis showed that the reservoirs were about twice as large as was first thought, BP and its partners decided to redevelop both the Schiehallion and Loyal fields using the latest technology to maximise their full potential and extend their lives for at least another 20 years. Production from Schiehallion and Loyal was suspended at the start of 2013 to prepare for one of the world’s biggest redevelopment projects. By then, during the 15 years in which Schiehallion’s FPSO had been anchored in the north east Atlantic Ocean, almost 400 million barrels of oil had passed through its tanks.

Foinaven floating, production, storage and offloading vessel. Source: BP

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ECONOMIC REPORT 2014