Excellent Potential for Faroe Petroleum’s Latest Project

Published at 09:05PM - 21/08/14

One of the biggest untapped oil fields in the North Sea is progressing well towards producing its first outputs in 2018 and looks set to produce oil for the next two to three decades, according to the developers, Faroe Petroleum.

The company’s CEO, Graham Stewart, has said that the company’s Perth and Lowlander fields have been evaluated as containing as much as 270 million barrels in total. Sixty-two million barrels of the oil, located around 140 miles away from Aberdeen, have been appraised as commercially recoverable.

Faroe Petroleum believes that their project is one of the biggest yet remaining in the North Sea, and comparable to the Catcher in terms of potential, a field which holds around 100 million oil barrels and which has recently been given the go-ahead by the DECC for production.

Faroe is based in Aberdeen and the company is now developing a field analysis plan with Parkmead, its operational partner, which holds a 52pc share of the Perth field. The Lowlander oil field is owned entirely by Faroe, which is listed on the UK’s AIM.

The project will see the two oil fields brought together and drilled as a joint operation between the two companies. Another company will be sought to join in with the work and invest a significant sum of money likely to be hundreds of millions of pounds to create the necessary production infrastructure. This is needed because the two fields are also notable for holding ‘sour crude’ or hydrogen sulfide. This is a corrosive substance, and it means that nearby production facilities, including the Tartan oil drilling platform, are unsuitable and cannot be used.

The prospect of a major oil field located in the central North Sea and producing oil in significant volumes by 2018 will help to boost expectations about the region’s future potential for gas and oil. The news comes as a Scottish think-tank has announced that oil and gas revenues for Scotland could be worth six times as much as UK government estimations.

The UK government estimated that North Sea oil and gas revenues were likely to represent £57 billion of value from 2014 to 2020. However, the think-tank N-56 believes that if plans presented by the Wood report and similar investigations are fully implemented, then this figure could increase to as much as £365 billion.

Only last week, the Bentley discovery in the east of Shetland, led by Xcite Energy, was found to be capable of producing up to 300 million barrels by 2050.

Kraken Drilling Locations Agreed by Partners

Meanwhile, in Edinburgh, EnQuest has announced that it expects to see the first oil produced from its Kraken development by 2016/17. The location, in the UK’s North Sea, will see initial drilling templates installed towards the end of 2014. Locations for the first development wells have already been agreed. Cairn is also acting as a partner for the Skarfjell oil licence, which could potentially incorporate other undeveloped oil fields in the nearby area. Cairn hopes to pre-qualify as an operator and will seek to apply for additional areas in the Barents Sea, using experience gained in drilling work in offshore Alaska.

Last updated on 04:21PM - 29/08/14