UK’s Golden Eagle Area Development Begins Producing

Published at 11:42AM - 05/11/14

The UK North Sea’s Golden Eagle Area Development has commenced oil production, according to Nexen Petroleum UK, the site operator. There are now two wells in operation producing 18,000 barrels a day. By 2015, the project is expected to hit peak production at 70,000 barrels per day.

The field includes standalone wellhead and production platforms alongside two sub-sea production systems. There are plans to ultimately drill six water injection wells and 15 production wells.

The GEAD incorporates the development fields of Golden Eagle, Solitaire and Peregrine, located on Blocks 20/1N, 20/1nS and 14/26a. The site is located around seventy kilometres away from Aberdeen, and water hits a depth of between 89m and 139m.

Nexen Petroleum UK is a subsidiary business of China National Offshore Oil Co Ltd and owns a stake of 36pc. Other owners are Maersk Oil North Sea with 31pc, Suncor Energy UK at 26pc and Edinburgh Oil & Gas at 5pc.

Li Fanrong, the CEO of China National Offshore Oil Company, said that the project had been successfully delivered on budget and to schedule and it followed global standards for safety. He added that it was creating over 2,5000 UK jobs and would shortly be contributing a significant amount to the economy.

Maersk Oil UK’s MD, Martin Rune Pedersen, said that the go-live announcement was a significant achievement for the project teams involved in getting the Golden Eagle Development up and running. He said that the project was key for the UK North Sea and for Maersk Oil Ltd due to its scale and economic potential.

The project is the second-biggest oil find in the UK North Sea since the 2001 discovery of Buzzard. The UK’s DECC approved the development plans in autumn 2011.

As Golden Eagle began producing, two of the UK North Sea’s oldest facilities, Brent Alpha and Bravo, concluded their operations last week.

The market also reacted on Monday when Brent dropped under $84 as Saudi Arabia sought to slash oil prices for American customers. Brent crude dropped by $1.25 to $83.5 a barrel, and US light crude settled at $77.6 a barrel — a drop of $1.15.

According to Reuters, Saudi Arabia increased its sale prices for oil in December to both Europe and Asia and cut its prices to the USA. OPEC will be meeting later in November to discuss production targets for next year. Ecuador and Venezuela are working together on a bid to support higher prices for oil, but a minister for the UAE said that the group was remaining calm.

Libya has supported a drop in production, while a number of other members, including Saudi Arabia, Kuwait and Iran, were not supporting potential oil output cuts.

At the same time, the USA is experiencing pressure to lift a forty-year ban on crude oil exports. Market analysts from Reuters explained also that the stronger American dollar had affected the price of oil, making the commodity more expensive for traders dealing in alternative currencies.

Last updated on 11:58AM - 06/11/14