Dana Petroleum announces first oil from Western Isles

Western Isles FPSO (Image source: Dana Petroleum)

Dana Petroleum this week announced first oil from its Western Isles development in the UK North Sea.

Production started on 15 November and has continued steadily and in line with our expectations.

Western Isles (Dana 77% and Cieco 23%) is now producing from the Harris and Barra oil fields in the Northern North Sea, 160km east of the Shetlands and 12km west of the Tern field.

With an investment of approximately $2 billion by the project partners, Western Isles is Dana’s largest ever project. The Western Isles development is expected to produce up to 44,000 barrels of oil equivalent a day when fully on production, adding over 30,000 barrels (net) to Dana’s daily production.

Dana Chief Executive Roy Elliot said: “The safe start-up of Western Isles is a proud moment and a great achievement for Dana and our owner the Korea National Oil Corporation – and it demonstrates our ongoing commitment to the North Sea.

“We thank all of our staff, contractors and project partners who have worked so hard to bring Western Isles to this point. We now look forward to many years of safe and reliable production.”

Brenda Wyllie, Northern North Sea Manager at the Oil and Gas Authority said: “The first oil milestone from the Western Isles Development is positive news and helps confirm the remaining potential of the UK Continental Shelf.  Dana’s approach to intervention, when managing a complex and remote project, has seen them successfully achieve this goal. The OGA welcomes investment in a mature area of the North Sea and looks forward to more of these developments coming on stream and enabling MER UK.”

The Western Isles development consists of production and water injection wells tied back to a new build floating production, storage and offloading vessel (FPSO) with oil export using shuttle tankers.The cylindrical FPSO measures nearly 90m at its widest and weighs over 28,000 tonnes, with the capacity to produce 44,000 barrels of oil a day and store 400,000 barrels in its tanks.

DANA PETROLUM at a glance

Dana Petroleum was formed in 1994 to exploit North Sea oil opportunities. In 2007 the company acquired Ener Petroleum for £24 million as well as Devon Energy Corporation's oil and gas operations in Egypt for US$375 million. In June 2010, Dana Petroleum agreed to acquire Petro Canada Netherlands from Suncor Energy for around $393 million, then later in September 2010 the company announced a further $372 million acquisition of certain Petro Canada UK assets.

Dana Petroleum Limited is a wholly owned subsidiary of the Korea National Oil Corporation (KNOC).

Dana operate in the UK, Egypt and the Netherlands.

UK OPERATIONS

Dana's portfolio in the UK consists of various exploration, production and development activities throughout the Northern, Central and Southern North Sea, West of Shetland, and in the Moray Firth.

Western Isles Project

The Dana-operated Western Isles Project will develop two discovered oil fields called Harris and Barra in the Northern North Sea, 160km east of the Shetlands and 12km west of Tern field.

It involves a subsea development of at least five production and four water injection wells tied back to a new build floating production, storage and offloading vessel (FPSO) with oil export using shuttle tankers.

In November 2017, Western Isles (Dana 77% and Cieco 23%) began producing from the Harris and Barra oil fields.

With an investment of approximately $2 billion by the project partners, Western Isles is Dana’s largest ever project. The Western Isles development is expected to produce up to 44,000 barrels of oil equivalent a day when fully on production, adding over 30,000 barrels (net) to Dana’s daily production.

Key Facts

  • Investment: $2 billion
  • Partners: Dana Petroleum (operator with 77%) and Cieco (23%)
  • Location: 160km east of Shetland and 5km south of the Hudson Field
  • Fields: Development consists of two discovered oil fields Harris and Barra
  • Depth: Fields lie in 165m of water at reservoir depth of 6,000ft
  • Reserves: Estimated at 100 mmboe with 45 mmboe economically recoverable
  • Production: Peak production rates expected to be c. 40,000 boepd
  • Approval: Government approval received December 2012
  • Field life: Estimated to be 15 years
  • First oil: November 2017

Triton

Dana has been a non-operated partner in the Bittern field since 2010, holding a 4.73% stake in the field until the acquisition of Hess’ 28.3% share. As one of the majority stakeholders in Bittern, Dana noted interest in taking over operatorship of the Triton FPSO and officially became operator on Monday 1 October 2012.

The Triton FPSO is located in block 21/30 approximately 120 miles east of Aberdeen, and produces oil and gas from the Bittern, Clapham, Pict, Saxon, Guillemot West and North West fields.

Triton is the company's first major operated asset in the UK, it consolidates their strong position in the Central North Sea and is a core part of Dana's strategy to acquire more operated positions where there is a strong commercial and operational rationale to do so.

The synergies realised from Dana’s operatorship of both the Greater Guillemot Area subsea facilities and the Triton FPSO will help maximise value from the company's interests in the area.

In addition to the direct operational benefits associated with operatorship of Triton, it will also give Dana valuable operational experience of FPSOs as they look forward to their $1.5bn Western Isles Development Project in the Northern North Sea, which involves the construction of a new-build circular FPSO.

Joint venture partners in Triton FPSO are Dana (51.966%), Shell UK (26.42%), Esso Exploration and Production UK Limited (20%) and Endeavour (1.614%).

Eagle

July 2016, EnQuest announced a discovery in respect of the Eagle exploration well in the Central North Sea. EnQuest asserted that it had drilled the well on a 100% working interest basis.

Prior to EnQuest proceeding to drill the Eagle exploration well, Dana had asserted to EnQuest that EnQuest did not have authority to do so.

It remains Dana’s position that it has a 50% ownership interest in the Eagle well discovery and it has reserved its rights under the relevant licence, under the Joint Operating Agreement and at law.

The company looks forward to the further evaluation of the Eagle results in due course.

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