Economic Report 2013

Talisman Sinopec Energy UK’s Montrose Area Redevelopment Talisman Sinopec Energy UK (TSE UK) is one of the newest and most dynamic companies exploring for and producing oil and gas in the North Sea. TSE UK, based in Aberdeen, was created in 2012 as a joint venture between Talisman Energy Inc and Addax Petroleum UK Limited, a wholly-owned subsidiary of China Petrochemical Corporation (Sinopec Group). TSE UK is one of the largest operators on the UKCS, with 26 fields, 11 offshore installations and one onshore terminal. The main purpose of the organisation is to unlock opportunities in the North Sea and build a safe, profitable and sustainable business. The most recent effort to realise this potential is the £1.6 billion Montrose Area Redevelopment (MAR) project which will extend the life of one of the UK’s oldest platforms – inaugurated in 1976 – to at least 2030.

TheMontrose platformwill undergo significant modifications, including the development of a new bridge linked platform (BLP) which is planned to be installed in 2015. Two currently undeveloped fields, Cayley and Shaw, will also be brought into production by being tied back to the BLP. The MAR project will unlock 100 million barrels of reserves when it comes on-stream in 2016 and will create or sustain more than 2,000 jobs during construction, fabrication, installation, subsea engineering and drilling. The government has recognised its value to the economy by making it the first project to benefit from a Brown Field Allowance (BFA), a tax relief introduced in 2012 to encourage the renewal and life extension of existing fields (see section 6 for more information about this allowance).

Figure 29: MAR Milestones

• 1969: Arbroath reservoir discovered, the first oil field on the UKCS • 1971: Montrose reservoir discovered • 1976: First oil from Montrose Field • 1990: First oil from Arbroath Field

• 1996: Arkwright Field developed via a subsea tie-back to Arbroath • 2005: Brechin Field developed as a subsea tie-back to Arbroath • 2007: Wood Field developed as a subsea tie-back to Montrose • 2007 to 2009: A successful exploration campaign resulted in the discovery of the Cayley, Godwin and Shaw Fields • 2011: Sanction of the Godwin Field development • 2012: Sanction of integrated Montrose Area Redevelopment programme to develop Cayley and Shaw via a bridge-linked platform at Montrose and to carry out further infill drilling in the Montrose field • 2013 to 2014: Godwin Field development by drilling extended reach well from Arbroath • Quarter 1 2016: First expected oil from Cayley and Shaw Fields

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ECONOMIC REPORT 2013