The development of the largest new field discovered in the UK North Sea for a decade has been approved by the UK Oil & Gas Authority. The Maersk Oil-operated high pressure, high temperature (HPHT) Culzean field in the UK central North Sea is expected to produce enough gas to meet 5 per cent of total UK demand at peak production in 2020/21. Culzean is also the largest gas field sanctioned since East Brae in 1990.
Discovered in 2008 by Maersk Oil and its co-venturers, the gas condensate field has resources estimated at 250-300 million barrels of oil equivalent. Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day. Maersk Oil and its co-venturers, JX Nippon and BP (Britoil) are investing around £3 billion in the development, with more than 50 per cent committed to investments in the UK. Over the projected life of the field, it is anticipated that £2.1 billion in operating expenditure will be spent in the UK domestic market.
The Culzean development has benefited from the HPHT Cluster Area Allowance introduced by the UK Government as part of the 2015 Budget. The allowance supports the development of high pressure, high temperature projects – which typically have considerably higher capital costs – and encourages exploration and appraisal activity in the surrounding area or ‘cluster’.
Welcoming the announcement, Maersk Oil’s ceo Jakob Thomasen said: “Culzean is an important development for the UK and also for Maersk Oil and our co-venturers. We are pleased the field will support UK economic growth as well as extend understanding of HPHT development. Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK – reflecting our commitment to the future of the North Sea region.”