London-listed oil firm Serica Energy is looking to bring its Columbus gas field online in late 2019, or 2020. The field is located in the UK sector of the North Sea.
The company has been trying to develop the field for years. It suffered a major setback back in 2013, when BG, the operator of the Lomond platform at the time, cancelled the Lomond Bridge Linked Platform that was to be part of the export route for gas and gas condensate from the Columbus field.
While Serica then said Lomond was not the only option for the Columbus to get online, the company has not given up on the platform as the potential development solution for the field, as it’s located nearby.
“The Columbus gas condensate field is located in close proximity to the Lomond platform, which is the offtake route for production from Serica’s Erskine producing interest. Serica as Columbus field operator is working towards a full Field Development Plan by the end of 2017 with a view to commencing development work in 2018. First gas is targeted for late 2019 or 2020,” Serica said on Thursday.
The company is now looking at two options to develop the gas field.
The first option, Serica said, is an extended-reach development well drilled into Columbus from the Lomond platform, located 5 kilometres away.
“This technology has been extensively used in the North Sea, especially in Norway,” Serica said.
Alternatively a well could be drilled as a subsea completion and tied into a proposed third-party pipeline to the Shearwater platform, with either option delivering similar levels of reserves recovery, Serica added.
Here’s the case Serica has provided in favor of the Lomond option:
“The Lomond platform has spare well slots and a jack-up rig can be utilised to drill a well into Columbus from the platform. The advantage of this route is that there is no pipeline or associated subsea equipment required and consequently time to hook up the well and bring it on production should be much shorter than would be required for a subsea well. A platform well also has the advantages of easy access for future well maintenance interventions and lower-cost abandonment. Columbus production into the Lomond platform is likely to benefit the Erskine and Lomond fields by reducing unit operating costs whilst improving the product mix and could result in deferring the date of platform abandonment thus increasing reserves recovery. Deferment of Lomond platform abandonment would also increase its attraction for other potential third party business to mutual benefit. “
The other option, on which Serica is also working, with Arran field operator, is the option of tying Columbus into a proposed new pipeline into the Shearwater platform.
Serica has explained how the second option would work:
This would be a longer offtake route and the Columbus development well would be drilled as a subsea completion. The advantages of this option are shorter drilling time and the potential for lower unit operating costs. However, there would be an overall increase in development costs and there would be greater complexity involved in coordinating with a separate field development, which is expected to result in a longer development timeline.
Whichever option is selected, Serica said it planned to take full advantage of current market conditions and latest drilling and subsea technology to ensure a low cost, efficient and reliable plan for development.
“Serica is undertaking studies on both options in order to make an informed decision, based on risks and economics, during the course of 2017, following which a field development plan will be submitted to the Oil and Gas Authority,” the company said.
In the updated on Wednesday, Serica said it was pleased with the production from the Erskine field, its only revenue source. The company then pointed the risk of a single field income stream, as that exposes the company to operational and infrastructure risks and the consequent need for adequate working capital to cover associated fluctuations in revenue.
Thus, Serica said its aim was to diversify its sources of income when suitable opportunities can be identified.
The company’s Executive Chairman Antony Craven Walker said: “We recognise our dependence upon Erskine as our only current source of income. Whilst this is generating material cash flows for the Company and we are expecting this to continue, we are looking to see how we can use our financial strength to diversify and enhance our cash generative capacity through the acquisition of additional production where we believe we can also add value.
“We see this as an essential part of our risk management strategy but a successful outcome would also increase the scale and spread of the Company’s operations and create greater visibility, financial capacity and liquidity for the Company to the benefit of shareholders.”
Offshore Energy Today Staff