UK independent Chrysaor is starting a new drilling campaign in its UK portfolio in partnership with Baker Hughes, a GE company.
The new service partnership contract with BHGE is expected to run approximately three years, covers the drilling, completion and subsea tie-in of development wells on Chrysaor’s operated assets, with BHGE supplying well services and equipment from its fullstream portfolio, Chrysaor said in a statement on Friday.
As part of the deal, Chrysaor as operator and BHGE as the service partner will share in the risks and rewards associated with both the operations and reservoir outcomes.
BHGE will contribute to the costs of the work program by funding a portion of the capital expenditure in exchange for a higher potential return should certain targets and success criteria, both operational and geological, be met.
According to the UK operator this innovative approach, which includes the setting up of an integrated team operating under Chrysaor, will ensure complete alignment between the two companies on the outcome of each well. As a result, overall delivery costs are expected to be reduced, improving the commercial attractiveness to Chrysaor of future projects in the sector.
Separately, Chrysaor has contracted the Rowan Gorilla VII ultra-harsh environment jack-up rig for the drilling campaign with an initial contract term of up to 18 months and an option to extend by a further two years. The first well of the program, a side-track at the Maria field, is expected to start in early May.
Phil Kirk, Chief Executive of Chrysaor, said: “Our initial Maria drilling campaign is the first phase of the redevelopment plans for our operated fields. With the application of focused capital and expertise we believe that we can increase recovery factors, add to our reserve base and extend the field life of the assets.”
Kirk added: “The innovative service partnership we have struck with BHGE is an important step in ensuring that the full potential of the UK’s North Sea resources is realized. Sharing in both the risks and the rewards of development activities mean that both Chrysaor as operator and BHGE as service provider are fully aligned and invested in the outcome of the program.
“We believe that this service partnership can serve as a model for other companies in the sector, encouraging a risk sharing approach between operator and service provider and increasing the attractiveness of the basin.
Zvonimir Djerfi, BHGE Europe President, said: “In today’s challenging global market, operators must continually optimize efficiency and reliability across their processes and through this collaboration we are demonstrating how BHGE’ s integrated expertise, service capabilities and technology portfolio is driving positive outcomes for one of the North Sea’s leading independent operators, and supporting more cost-effective production.
“This agreement is an important step in redefining the rules for collaboration between industry partners,” Djerfi concluded.
It is worth reminding that Chrysaor got its UK North Sea assets through a $3.8 billion worth deal with Shell, which was concluded last November.