BP and its partners have fired the start gun on the £3 billion ($4.8 billion) Quad 204 project, covering the redevelopment of the Schiehallion and Loyal oilfields west of the Shetland Islands.
Hyundai Heavy Industries has been handed a contract to supply the 270-metre long floating production, storage and offloading vessel that will replace the existing Schiehallion FPSO.
A BP spokesman confirmed that an order had been placed with the South Korean company “very recently”. The vessel, due to begin output in 2016, will be able to process and export up to 130,000 barrels per day of oil and have a storage capacity of more than 1 million barrels.
Trevor Garlick, regional president for BP’s North Sea business, said the sanction was a milestone in BP’s strategy of maintaining a material and high-quality North Sea business.
He said: “The Schiehallion and Loyal oilfields are established assets with a strong future — and we and our co-venturers are taking some significant steps to maximise the greater potential we now see in these fields.”
The Schiehallion and Loyal fields have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available, BP said.
The redevelopment will also see a major investment to upgrade and replace the fields’ subsea facilities.
Production is expected to stretch out to 2035 and possibly beyond. The new FPSO will be shared by the Schiehallion and Loyal field owners in an 82:18 split.
Upstream reported earlier this year that Hyundai is also waiting on confirmation it has landed a second major order from BP to build two decks for the significant Clair Ridge project, also in the West of Shetland area.
It is understood that the awards for Clair Ridge had been expected before Quad 204 but talks are thought to have been complex for a package valued at more than $400 million.