ECONOMIC REPORT 2013
37
fields and high pressure, high temperature
field allowances, which have enabled investors
to take a fresh look at the economic viability of
projects on the UKCS.
The tax relief to support large shallow water
gas fields provided the Cygnus partners with
the certainty and confidence to proceed with
the project which was sanctioned in August
2012. In due course, production from Cygnus
will generate substantial tax revenues for the
Exchequer, as well as contributing significantly
to the balance of payments, security of supply
and job creation. GDF SUEZ E&P UK believes
that it is important that the right investment
and fiscal regime exists to help move potential
new projects through to their development.
Leading edge geophysics and a successful
appraisal programme have been central to the
progress of Cygnus since GDF SUEZ E&P UK
became operator in 2002. The company has
transformed a small discovery into the largest
gas development in the SNS during the last 25
years. Cygnus also faces technical challenges
because of its shallow water location. This
limits the number of vessels that can work in
such water depths which in turn affects the
weight and size of the platforms. In deeper
water, a number of these platforms could be
combined. The large areal extent means that a
minimum of ten long wells (up to 18,000 feet)
with horizontal sections (up to 3,500 feet) have
to be drilled to reach the multiple reservoirs.
By drawing on international knowledge
within the organisation, applying bespoke
drilling techniques and revitalising existing
infrastructure, GDF SUEZ E&P UK aims to
ensure that Cygnus is a North Sea success
story set to secure future energy supplies.
Figure 27: Cygnus Milestones
•
1988 and 1989:
Blocks including the Cygnus field were drilled by other operators, but were not pursued
because initial evaluation suggested a poor quality reservoir
•
2002:
GDF SUEZ E&P UK acquired the licence for the blocks
•
2003:
The appraisal programme began with the first 3D seismic survey in the SNS using what was then new
long cable technology
•
2006:
First appraisal well drilled
•
2009:
Plans were drawn up for a relatively simple development; however, other parts of the field showed much
better reservoir quality. Two further appraisal wells were drilled.
•
2010:
Another two appraisal wells drilled, confirming a westerly extension with good quality reservoir delivering
high flow rates
•
2011:
Extended development concept for Cygnus selected
•
July 2012:
Shallow water gas field tax allowance introduced by HM Treasury
•
August 2012:
Project sanctioned
•
September 2012:
The Chancellor of the Exchequer, George Osborne, visited Heerema yard in Hartlepool for
ceremonial contract signing
•
December 2012:
First steel for the project cut at Heerema, Hartlepool
•
May 2013:
First steel cut for the four jackets at Burntisland Fabricators, Fife
