Premier Oil, a UK-based oil company, has reduced capex for its Catcher development in the UK North Sea to $1.7 billion which is 24 percent lower than at sanction.
Premier Oil said in its Trading and Operations Update on Thursday that further reduction in capex estimate was driven by the weak sterling-dollar exchange rate given that 55 percent of the project’s remaining capex is denominated in sterling.
The company expects further cost reductions from the release of contingencies and allowances as work-scopes continue to be executed efficiently.
The Catcher field project is operated by Premier Oil with a 50 percent interest, while Cairn Energy, MOL Group, and Dyas are partners.
The development entails 22 subsea wells (14 producers and 8 water injectors) on the Catcher, Varadero and Burgman fields which will be tied back to the BW Offshore-owned FPSO. The oil will be offloaded by tankers while the gas will be exported through the SEGAL facilities.
After the company said in May that the project remained on track for first oil in 2017, Premier on Thursday provided additional assurances that the project, as well as FPSO outfitting, continues to be on schedule while well delivery remains ahead of prognosis.
The outfitting of the FPSO is being done in Keppel’s yard in Singapore with over 2,000 contractors working on the vessel. Fabrication of the topside modules has been completed with 12 out of the 13 modules already lifted onto the FPSO. The final module lift is planned for later this month.
The sail-away date of the FPSO from Singapore for a 2017 field start-up remains on track meaning that the reported delays on the FPSO hull construction from 2015 are a thing of the past.
Premier noted that all of the subsea equipment had been installed, including the risers, bundles, towheads, manifolds, midwater arches along with the buoy and mooring system. The final spool tie-ins were completed earlier this month thereby concluding the planned 2016 subsea campaign under budget.
Furthermore, the major subsea campaigns are now complete with only short campaigns required in 2017 to tie-in wells as they become available from the drilling program. Some additional subsea work will be done during commissioning operations once the FPSO has been installed.
Tony Durrant, Chief Executive of Premier Oil, said: “Excellent progress has been made on the Catcher project, which remains on track for first oil next year.”
The Catcher is expected to produce 96 mmboe with a peak production rate of around 50 kbopd.
Offshore Energy Today Staff