By Andrew Callus
LONDON Jan 2 BP began production from
the Skarv oil and gas field it operates off Norway's coast on
the last day of 2012, hitting a reduced new project target with
just hours to spare and after a months-long delay.
Announcing the move on Wednesday, the British oil company
brought its total 2012 major project start-ups to five, having
targeted six earlier in the year with Skarv scheduled for the
Skarv, a big project by North Sea standards with an expected
life of 25 years, will ramp up production to around 125,000
barrels of oil equivalent per day (boe/d) within the first six
months to an expected maximum daily rate of 165,000 boe/d by
year end, BP said.
Just over half of the output from the field, which contains
an estimated 43 bcm of gas and 13 million tons of oil, will be
oil and condensate and the rest gas.
As operator, BP has a 24 percent interest in the field,
which will add about 1 percent to its output of oil and gas.
State-backed Norwegian group Statoil has a 36 percent stake and
will see its output boosted by 2.5 percent.
The other partners are Germany's E.ON E&P Norge
AS with 28 per cent and Polish gas monopoly PGNiG with
For PGNiG, the project is its biggest Norwegian asset and is
part of efforts to reduce its reliance on Russian gas. It said
it expects its first major offshore project to lift its
Norwegian output to about 370,000 tonnes of crude oil and 0.3
billion cubic metres (bcm) of gas in 2 01 3 .
The state-owned company has forecast revenue from its Norway
operations at an annual total of between $400 million and $500
million in the next three years.
Skarv's startup was described by BP as a key operational
milestone in one of the core high-margin areas outlined in a
Dec. 3 strategy update.
BP's success rate in its core business of exploring for and
producing oil and gas is under scrutiny as it fights to put
behind it the costs of its 2010 U.S. oil spill and troubles with
its investments in Russia.
Skarv has suffered delays as its developers worked to put
into operation a groundbreaking floating production storage and
offloading (FPSO) vessel, built for the tough conditions 210
kilometres off Norway's west coast in 350 to 450 metres of
The delay caused Norway to miss its 2012 crude output
Analyst Peter Hutton of RBC Capital Markets noted BP had yet
to outline capital spending plans for the field.
In BP's list of top projects, Skarv was preceded by four
other startups in 2012: Clochas Mavacola and PSVM, both in
Angola, Galapagos in the U.S. Gulf and Devenick in the North
A sixth 2012 project, Angola LNG, is now expected to start
up in 2013, one of nine other projects slated for the coming two
The delay to Skarv had forced PGNiG to cut its overall
output goals for 2012 and 2013 in October. Now the group expects
to extract 4.8 bcm of gas and 1.12 million tonnes of crude in
2013, compared with an earlier estimate of 4.9 bcm and 1.24