BP has sanctioned two smaller North Sea developments with a combined investment of about £410 million ($580 million), giving a welcome shot in the arm to the recovering UK sector.

The Alligin and Vorlich fields are both satellite accumulations that will be tied back to existing offshore hubs in the West of Shetland area and central North Sea, respectively.

Unlike the supermajor’s massive Quad 204 and Clair Ridge developments, Alligin and Vorlich offer relatively short delivery times and faster returns on investment as well as lower costs.

They are both expected to start up in 2020 and produce a combined 30,000 barrels of oil equivalent per day at peak.

Alligin, a two-well development, will be tied back to BP’s Glen Lyon floating, production, storage and offloading vessel, the centrepiece of Quad 204 to the west of the Shetlands.

Vorlich, in the central North Sea, also a two-well development, will be tied back to the Ithaca Energy-operated FPF-1 floating production facility, the nerve centre of Ithaca’s Greater Stella Area production hub.

Incoming BP North Sea regional president Ariel Flores said: “These projects follow on from a period of record investment by BP in the North Sea which helped deliver our Quad 204 project last year and will deliver our Clair Ridge project which is planned to start-up later in 2018.

“While not on the same scale as Quad 204 and Clair Ridge, Alligin and Vorlich will lead to significant production gains and further demonstrate BP’s commitment to the North Sea.”

Kevin Swann, North Sea senior research analyst at consultancy Wood Mackenzie, said the investment was further evidence that the majors are not finished in the region, albeit the schemes signal a “change of tack” by BP after its massive West of Shetland projects in recent years. “Smaller fields continue to be the lifeblood of the shelf, so it is encouraging to see a major like BP getting involved,” he said. “As well as more production for BP, these new developments also provide a boost to the nearby platforms they tie into, improving economics and allowing them to produce for longer.”

BP has also awarded a major contract for the Alligin development to Subsea 7, which will provide project management, engineering, procurement and construction services for the subsea pipelines. Offshore work is expected to get under way in 2019.

As reported by Upstream recently, BP has submitted its environmental statement for Vorlich to the UK authorities and is finalising its contracting strategy for the development. BP operates Alligin on 50% in partnership with Anglo-Dutch supermajor Shell on 50%, while it operates Vorlich on 66% alongside Ithaca on the remainder.

A Shell spokesperson said of the Alligin sanction: "This development is proof that the industry’s increasing competitiveness, and sustained improvements to the fiscal and regulatory regimes, can produce results."

Weekly

BP move a boost for North Sea