General
By G.A.Ponsonby
Rumours of a massive oil find to the west of Shetland are growing after Prime Minister David Cameron made a secret visit to the islands just under two weeks ago.
On July 22nd Mr Cameron turned up in Shetland unannounced. At the airport the Prime Minister was accompanied by the Secretary of State for Scotland Alistair Carmichael.
The secret visit, the first by a serving UK Prime Minister for 34 years, angered national media who were unable to despatch journalists to Shetland in time. Commenting on the visit, Scottish Secretary Carmichael told a local newspaper that the visit was, “the closest to a secret I’ve known in Shetland”.
However, suspicions were aroused when, within days of the visit, BP announced that the start-up of the Clair Ridge twin-bridge oilfield had been delayed by one year. However the delay was said to be due to the amount of work being carried out by the South Korean fabricator.
The Clair field is located 75 km West of Shetland – Clair Ridge is the second phase of the Clair Field development. BP has invested £4.5 billion in the Clair Ridge Project and expects to extract 640 million barrels of recoverable oil, and see up to 120 thousand barrels per day at peak.
Estimates put the total amount of oil at 7 billion barrels equivalent.
One week before Mr Cameron’s visit, industry specialists Synectics announced it had designed and delivered an end-to-end surveillance solution for Clair Ridge. The new technolocy is expected to result in more than 40 million additional barrels being cost-effectively recovered over the lifetime of the field.
Oil reserves known to exist around the Shetland waters have never been extracted due to the difficulties in getting to the reserves. However advances in technology coupled with high oil prices have now made the reserves economic to extract.
The Clair Ridge project will include the world’s first offshore full field deployment of LoSal enhanced oil recovery technology to modify the salinity of water injected into the reservoir and increase the recovery of oil.
This weekend rumours spread that workers on a rig in the Clair field had been sent home on full pay and told not to return until late September, coincidentally after the independence referendum.
An unnamed worker believed to be from the rig in question is said to have revealed that the amount of recoverable oil exceeds initial estimates and that the Clair could in fact be one of the biggest in the world. There are also claims that the quality of the oil discovered is much better than usual for the north sea.
The story was broken on Friday by online site Yes International. According to the outlet ‘contractors working for BP were stood down after obtaining the results of the latest test drilling statistics.’
It added: ‘It was said that the test results [for Clair] “far exceeded expectations”.
‘We have had other information that contractors have in fact been sent home on full pay just after receiving these results and that they were advised that they would not be recalled until after the referendum.’
Yes International revealed that Downing Street had refused to answer any questions but that BP had confirmed “We intend to invest billions in the area in the coming years”.
The rig believed to be involved is the Paul B Loyd Jr which was recently transported to the Clair Ridge sector. According to the offshore industry tracker Rigzone, the status of the rig is currently ‘drilling’.
Industry magazine Upstream said of Clair Ridge: ‘positive signals are emerging from an ongoing appraisal drilling campaign.’
Speaking at a press briefing days ago, BP chief executive Bob Dudley said: “We remain very enthusiastic about Clair Ridge – appraisal wells are looking good. It is helping us to define the structure out there.
“[Clair Ridge] will be a project once we get it on in the next few years that has the potential to produce until 2050.”
If the rumours of a massive find are true, then the Clair will become the second field to the west of Shetland to exceed expectations.
In June this year it emerged that the Lancaster field had also produced results that were greater than initial estimates.
Hurricane Energy, the company behind the find, said production tests using a pump achieved a flow rate of 9,800 barrels of oil per day, well above expectations.
“I am delighted to report the successful completion of our testing operations which have achieved hydrocarbon flow rates in the upper range of our pre-drill estimates,” said chief executive Robert Trice in a statement.
The Lancaster field is believed to hold a fifth of the North Sea’s total untapped oil and gas resource.
Newsnet Scoland have asked questions of the Scotland Office and BP. Any significant information received will be reported.
[Newsnet comment: The issue of North Sea Oil has been at the centre of the independence debate for decades. In 2005 a secret report emerged that revealed successive Westminster Government’s had withheld the true value of North Sea oil from the Scottish people.
In 1974 the UK Government commissioned a report into the potential of North Sea Oil and how it might influence support for Scottish independence. The report made clear that an independent Scotland would be far richer than if it remained within the Union.
The report’s conclusions were so dangerous that it was designated secret and hidden for thirty years before a Freedom of Information request forced the UK Government to reveal its contents.
Newsnet Scotland copied the entire report, together with an introductory letter written in 1975 by its author Gavin McCrone, and published it – it can be read here.
Publication of the McCrone report by Newsnet Scotland followed an admission by former Labour Chancellor Denis Healey that the Labour Government of the 1970s deliberately hid the true value of Scottish oil in order to thwart support for the SNP.
Newsnet Scotland published a short video – narrated by actor David Hayman – which summarised the report’s conclusions. It is reproduced below.
]
BP do not run their exploration and drilling activities from the Shetlands. They are run from Dyce. I can think of no oil company that does this.
The mundane fact of life is that Clair Ridge is at least 1 year late (which, incidentally, means there is no chance whatsoever of UKCS oil production increasing this side of 2017). As well as the rig crews, BP are seeking to redeploy their ops teams for the year as there is no work for them to do.
While I’m not an energy stocks expert, (echoing Virgil here) the Jul 3 announcement from HUR that “The group said it expects to make a further announcement by the end of the third quarter, once it has completed the technical analysis of the results.” seems to indicate that the reassignment of rig staff at this time is entirely consistent with a completion of this phase of exploration being completed.
One doesn’t need to invoke conspiracy theories to explain why Dave Camoron and the SoS made a personal visit evidently without announcing it in advance to the msm. They just desperate to keep attention away the fact that potential oil reserves are likely to be far larger than currently estimated.
There’s no way this would be happening if there wasn’t a massive amount of oil still to be extracted.
Covering 220 square kilometers, BP and its partners have estimated Clair to hold 8 billion barrels of oil equivalent (boe) of in-place reserves.
Continues..
“Located in a region of the North Sea (?)concentrating up to 17% of the UK oil and gas reserves, the Clair field should tell in 2015 to BP and its partners Chevron, ConocoPhillips and Shell how much capital expenditure to plan for the Greater Clair project that could come on stream in 2020.”
Looks like, 24 years on, they have found a solution 🙂
More oil than has ever been dreamed of.
This has a gremlin; if you go to www.scotsindependent.org click on Features and scroll down to Scotland’s Atlantic Margin it should work OK
Honestly, I’m despairing at this. All that’s going to happen if this story gets pushed too far is someone in an official capacity at BP will make a statement rubbishing it and half the Yes campaign will look like a bunch of conspiracy theorists. Newsnet Scotland should not be trying to stir this up – your site has far too high a profile for that.
Claims that its the biggest in the world and that rig crews have been sent home lest they spill the beans are rumours and nothing else at this stage.
“Size and nature of the processes to be mobilized to develop Greater Clair
– Additional installation to be added to Clair Ridge to optimize production and extend the plateau production period.”
If the rumour is true and the investment activity of the past two years would suggest there is something to it, how would the general public feel about being lied to yet again on this subject?
Better yet. If true and the PM has prior knowledge of this find what does this say about partnership and trust between Westminster and the Scottish electorate that he has not come forward with news of the find?
They employed these tactics in 1979 and they will again employ them in 2014, regardless of this oil find story being real or just a rumour we must be vigilant to their dirty tricks and make sure they are reported on social media and independence websites like this one, whenever they are discovered.
How and ever the point I’m making is that their narrative has been ‘the most successful partnership/union in history’ and what the possible fallout/reaction may be for sections of the electorate on discovering they weren’t really such trusted ‘partners’ after all.
Vote Yes.
Also recovery rates end up being much higher as technology improves. Statoil is now approaching 60% average recovery rates and is aiming for 70%.
The UK government has a past record in trying to conceal the extent of Scotland’s oil wealth, so there would be no surprise if pressure was being put on BP to delay the recent Clair drilling results, or new estimates.
Unlike smaller companies, BP is big enough that it doesn’t have to report individual well results to the market.
BP, like all listed companies, has a duty to act in the interests of its shareholders. They would be breaking the law if they deliberately withheld information (e.g. a massive oil find) which would materially affect the share price.
Approximately 800 million BP shares will be traded between now and the referendum. If BP were deliberately suppressing the share price by withholding information, not only would they be breaking the law but they would be relentlessly pursued through the courts by those who had sold those 800 million shares at a discount due to the withholding of information.
This is a nonsense story and quite frankly it is embarrassing the amount of people who will credulously take this sort of guff in.
You also have to remember that the UK government dishes out the licenses, and controls the tax breaks, so BP will play nice here.
Anyone who thinks that the UK government would want news of a major find to be announced months before the referendum would have to be extremely naive.
UK governments have deliberately played down the extent of oil for years, Tory and Labour alike. Even now their resource estimates are ridiculously low – less than half that of the industry !!
Ex labour chancellor Denis Healey recently admitted “we did underplay the value of the oil to the country because of the threat of nationalism.” and “I think they are concerned about Scotland taking the oil, I think they are worried stiff about it.”
Which will, of course, show that “Yes” is trailing badly, blah, blah, blah.
An obvious ploy to try to put Salmond on the back foot before he’s even uttered a word – courtesy of our “impartial” friends at STV.
Announcing the poll at the start is them signalling: “no matter what Salmond says don’t even dare to think that ‘Yes’ might actually win.” What kind of “impartiality” is that?
These blatant attempts to manipulate public opinion really do get very tiresome indeed.
So what does Scotland get out of the oil at the moment…a few jobs and no profit
Nobody is saying the oil isn’t there anymore – that’s just plain daft. In fact, the Clair field was discovered in the 70s and is as big as anything found in the North Sea. It is not a new discovery. However, the oil is heavy and the geology poor, and the geology is what is limiting the expected recovery from the field.
“The basement play has been largely ignored in the U.K. It is potentially a game changer for companies, particularly West of Shetland. BP’s massive Clair Ridge development, sits at the other end of the Rona ridge from where Hurricane is active. BP is looking at the third phase of the Clair development and says the field could have 8 Bbbl of oil in place. Given that BP has produced oil from basement with earlier Clair well tests, the potential offered by productive basement reservoirs could add a significant amount to that. In fact, BP has invested in Hurricane. The U.K. government is very keen to see the basement reservoirs developed, and is making noises about offering tax losses for the basement play, which could certainly improve the economics.”
Also the articles in the Scots Independent referred to were also the work of Big Mac.
Whilst in Scotland they’ll be more austerity and attacks on the poor and disabled, surely we’re not that stupid to vote no are we?.
The recent appraisal wells could extend this further.
Recovery rates should also end up being far higher than initially thought, with the new technology used such as heated pipes and low salinity waterflooding.
And as mentioned above, there is the added potential in the Clair basement rocks after the recent success of Hurricane’s Lancaster well on the same trend?
hurricaneenergy.com/…/…
Perhaps this is what some of the new appraisal wells have been targeting?
If similar horizontal wells work well in the Clair basement then the increase in reserves could be huge..