Oil & Gas UK Economic Report 2014

Magnus – Enhancing Recovery WoS is a key part of BP’s UKCS strategy for the future, but its remoteness means much of the company’s investment would not have been feasible without the ability of the Magnus field in the NNS area to handle gas from WoS. The gas injected for EOR at Magnus is imported from the Schiehallion, Foinaven and Clair fields, via the Sullom Voe Terminal on the mainland of Shetland. Now BP’s oldest UKCS field, Magnus has been producingsince1983.Theoriginaldevelopment submission envisaged production lasting until the mid-1990s, so it has already surpassed that original expectation by almost two decades. Magnus’ longevity is becauseof the emergence and application of new technologies to improve overall recovery. Water injection and, from 2003, water-alternating-gas enhanced oil recovery (WAG-EOR) have been the cornerstones of the operation’s impressive production performance to date. At discovery, BP estimated original oil in place at between 845 million and 1.15 billion barrels; however, as a result of EOR, an estimated one billion barrels may now be recoverable 11 . WAG-EOR accounts for a quarter of Magnus’ current production, making it one of the most successful EOR schemes in the world. While enhancing recovery from the core field area provides the backbone of Magnus’ extended life, that future will also allow BP to produce from the deeper and more complex areas of Magnus’ reservoir.

field to processing facilities on Shetland. The development will produce an estimated 640 million barrels of oil, deliver up to 120,000 bpd and provide a hub for future expansion. The project team is headquartered in London, where over 750 people are currently employed. Approximately half of the Clair Ridge investment is being incurred in the UK, with over 80 British companies providing engineering design and support services, hook-up and installation services, manpower, and a wide range of equipment. The Clair Ridge development will also include the first large-scale, offshore EOR scheme. It will apply reduced salinity water injection ( LoSal® EOR) to extract a higher proportion of oil over the field’s life. To reduce the project’s environmental impact, dual-fuel generators will power the platforms, incorporating waste heat recovery technology. Vapour recovery will also be used to capture and recycle low pressure gas for use as fuel or for exporting to shore. In 2013, a major appraisal drilling programme began to help define a possible third phase for Clair’s development. The objectives are to provide greater certainty of overall reservoir volumes, to evaluate technologies that will improve recovery from the Clair field overall and to test the possibility of new stand-alone developments and linkages to Clair Ridge. The nature of the Clair reservoir means that its producing wells are capable of flowing at steady, but low rates for a long time. The more this is developed, the longer the production life. With continued development, BP expects Clair to be producing in the 2050s, possibly even until 2060.

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11 The “original oil in place” represents the originally estimated resources in the field; the “one billion barrels … recoverable” represents the reserves which are now estimated to be recoverable during the life of the field.

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ECONOMIC REPORT 2014