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UK Government approves Statoil’s US$7B development of North Sea Mariner heavy oil field

The UK government’s Department of Energy and Climate Change (DECC) approved the field development plan put forward by Statoil and its co-venturers for the Mariner heavy oil field. The project entails investments of more than US$7 billion and is the largest new offshore development in the UK in more than a decade.

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Location of the Mariner field. Click to enlarge.

Statoil expects to start production from Mariner in 2017, and the field is expected to produce for 30 years. The average production is estimated at around 55,000 barrels of oil per day over the plateau period from 2017 to 2020.

Statoil has extensive heavy oil experience from offshore fields in Norway and Brazil, which will enable it to develop the Mariner field. The field will be developed with a production, drilling and quarters (PDQ) platform based on a steel jacket, with 50 active well slots, and a floating storage unit (FSU) of 850,000 barrels capacity. In addition a jack-up rig will be used for the first four to five years.

More than 140 reservoir targets for production or injection are planned for Mariner. While the number of well slots at the platforms is less, this will be solved through use of multi-branch technology, side-tracks and reuse of slots.

The Mariner Field is located on the East Shetland Platform of the UK North Sea, approximately 150 km east of the Shetland Isles. The Mariner oil field consists of two shallow reservoir sections—the deeper, Maureen Formation at 1492 meters (4,895 feet) and the shallower Heimdal reservoir at 1227 meters (4,026 feet). The oil is heavy with API gravities of 14.2 and 12.1 and viscosities at reservoir conditions of 67 cP and 508 cP, respectively for Maureen and Heimdal.

North Sea oil and gas is a vital asset. It provides energy security for the UK, reduces our reliance on volatile international energy markets and supports hundreds of thousands of jobs across the country.

Mariner will be one of the biggest projects ever in the North Sea and the £4.6 billion commitment over 40 years from Statoil is a vote of confidence in the future of UK oil and gas. Importantly, unlocking heavy oil production marks a new chapter in development, opening the potential for five per cent of our oil reserves.

The Government is working hard with industry to ensure North Sea oil and gas continues to provide energy security and jobs. Our efforts to get unused fields into production, a fiscal regime that encourages investment—together with new, advanced technology—is extending UK oil and gas production beyond what was thought possible. The result is that North Sea investment is at an historic high, with Mariner joining an ever growing list of recent field approvals.

—UK Energy and Climate Change Secretary Edward Davey

Since Statoil entered in 2007, the company has developed a leading heavy oil position in the area, as an operator with 65.11% equity in Mariner and 81.6% equity in the Bressay field. Statoil expects to make a final investment decision for Bressay in 2013.

Statoil acquired 44.44% and operatorship for Mariner from Chevron in 2007. Statoil acquired a further 20.6667% of Mariner from Nautical Petroleum in 2010. JX Nippon Exploration and Production (U.K.) Ltd (28.89%) and Alba Resources Limited (6%) are partners in Mariner. Alba Resources Limited is a wholly owned subsidiary of Cairn Energy PLC.

Mariner was discovered in 1982, but development could not be progressed at the time because of the technical challenges involved in developing this dense and viscous oil offshore. With technology developments in the 1990s (in particular horizontal drilling and improved well completion techniques) development became more attractive, but progress remained slow. In 2005, DECC declared Mariner fallow, which facilitated a realignment of licence interests, the acquisition of new seismic in 2008 and the submission of a Field Development Plan in September 2012.

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