Alpha Petroleum has entered into agreements with Teekay Offshore for its Petrojarl Varg Floating Production Storage and Offloading (“FPSO”) unit to be deployed to the Cheviot oil field.
Cheviot, fully-operated by Alpha Petroleum, has been described by the operator as one of the largest undeveloped oil fields in the UK sector of the North Sea.
Teekay and Alpha had entered into a Front-End-Engineering and Design (FEED) study over a potential FPSO charter deal back in April 2017.
The latest agreement, subject to condition precedents such as financing, will call for Cheviot-specific process modifications to be made to the FPSO unit, ensuring that it can safely operate for the maximum 10-year term of the contract while maximizing production.
Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons. The Teekay Petrojarl Varg has been laid up since Repsol decided to stop production at the Varg field in Norway in 2016.
As for the Cheviot modifications to the FPSO, these will be made by Sembcorp Marine Rigs & Floaters PTE. Ltd in Singapore with yard work on the FPSO scheduled to start in the first quarter of 2019.
Alpha Petroleum last year said expected sanction of the development was the third quarter of 2017, with first oil expected in 2018. These dates haven’t been met.
The company on Friday said it expected to achieve sanction for the Cheviot development in Q4 2018. It is targeting first oil production in Q2 2021, at an expected rate of at least 30,000 barrels per day.
Alpha Petroleum has previously announced that Baker Hughes GE (“BHGE”) will partner with the firm on the advancement of the subsea infrastructure and integrated drilling services for Cheviot.
The Cheviot development programme will consist of a minimum of 18 wells: 13 production wells, two water injection wells and two gas injection wells. It also includes one production well established in the satellite Peel oil reservoir.