Premier lining up FPSOs

March 24, 2013

UK-listed exploration and production firm Premier Oil is in the process of picking two separate FPSOs for projects in the North Sea.

The firm said it was out to tender on its North Sea Catcher project for an FPSO. Concept select was agreed in December and development approval is expected to the sought once tendering is complete.

Premier said it would also be looking for a new FPSO for the Norwegian North Sea Bream field (non-operated) as part of a life extension project.

The developments come in addition to work on the west of Shetland Solan development (single jacket), and Dua (offshore Vietnam), both due on stream next year, as well as moving forward the Sea Lion development in the Falklands, which it hopes to get sanction on by mid-2014.  

At the end of this month (March) it is expecting first oil from the UK North Sea Huntington field (using the Sevan Voyager FPSO). After a ramp up period, the field is expected to produce 25-30 mboepd (gross), following a successful development drilling program. 

Work on the smaller Rochelle field (Premier 15%) was now expected on-stream around mid-year after storm damage to the initial development well.  The rig is currently drilling the Rochelle West well and will return to Rochelle East after first gas.

Premier is also looking to drill at least 15 exploration and appraisal wells in 2013; five high impact wells targeting in excess of 150 mmboe, including Luno II (spudded); Matang and Bonneville well results expected imminently; and the high pressure high temperature Lacewing.


Premier holds 40% in PL407, which contains the Bream field, and an 80% operated interest in the adjacent PL406 license, which contains the Mackerel oil discovery and the Herring exploration prospect. Premier said engineering studies for the subsea systems and wells for Bream were completed during 2012, but studies carried out for the lifetime extension and upgrade of the FPSO targeted for the field demonstrated it was not suitable. It said commercial negotiations were now underway for a new build FPSO and it is expected that front end engineering studies will start in the second quarter of 2013. Mackerel is expected to the become a subsea tie-back to the Bream FPSO. An exploration well on the adjacent prospect, Herring, is planned to be drilled as part of the development project.

Project sanction and submission of development plans to the authorities for the Bream development is expected in early 2014.  First oil is targeted for 2017 with an initial production rate of approximately 14,000 boepd net to Premier.

Elsewhere in Norway, commercial discussions have been held with field owners in the Frøy area with the intent of developing a central processing hub for a number of discoveries close to Frøy. Premier said “this has proved a slow process, however the pace is expected to pick up in 2013 with equity alignment discussions taking place with the operator of a nearby field”.


On the Huntington field, the six well development program was successfully completed in July 2012 with three of the four producers coming in above expectations, said Premier. The FPSO Voyageur Spirit sailed away in September and all five risers have subsequently been installed. Adverse weather conditions late in the fourth quarter delayed the commissioning and installation program.  However, the DSV Polaris is nearing completion of the final subsea tie-in in preparation for first oil, which is anticipated by the end of the month. 


On the Rochelle project the subsea pipeline and umbilical installation program and upgrades to the host Scott platform were successfully progressed in 2012.  The East Rochelle well, the first of the two development wells, was damaged during a North Sea storm in February 2013.  As a result, drilling operations were suspended safely pending further analysis and the order of the development wells was reversed with the Prospect rig spudding the West Rochelle well in February.  First gas from the Rochelle field is now expected either at the end of the second quarter or in the third quarter.


The development concept, which was formally approved by the joint venture in December, consists of a leased FPSO with subsea tie-backs, said Premier. The project has now entered the design phase and the tender process with the FPSO providers and for the subsea facilities front end engineering and design (FEED) is under way. The design phase is expected to be completed in the third quarter of 2013 and it is anticipated that the partnership will move to joint venture sanction thereafter.  Timing of first oil from the Catcher field is dependent on the results of the FPSO tender process. Premier is currently modelling as the second half of 2016.


Premier said building on the work that Rockhopper Exploration had already started, it expected to make key development concept decisions during the course of 2013, with final development approval targeted for mid-2014.  “This should facilitate first oil from the Sea Lion field during 2017,” said Premier.  “Whilst the geology of the North Falklands Basin is complex, we also see a large number of prospects and leads which offer potential for future exploration.  We are working closely with the Rockhopper team to define the targets for the next exploration programme, now expected in late 2014 or early 2015.”


In 2013, Premier plans to drill 15 exploration and appraisal wells.  This includes five high impact exploration wells targeting in excess of 150 mmboe, including the Luno II well which is currently drilling on the south west margin of the Utsira High, and the Lacewing well, Premier’s first high pressure high temperature well in the North Sea.  In addition, we look forward to the results of the Kuda Laut and Singa Laut wells in Indonesia and the Ca Voi exploration well in Vietnam.  The latter is a true frontier exploration well with the potential to open up a new play in Eastern Vietnam. We also hope to replicate our near field exploration success achieved in 2012 by the drilling of six near field wells in 2013, including the Matang well in Indonesia and the Bonneville well in the UK North Sea, both of which are currently drilling. 

Simon Lockett, chief executive, said: "Premier has built a strong asset portfolio which will act as a springboard for significant further growth over the medium-term. We have a number of development projects coming on-stream in the short-term, an exploration portfolio with increasing materiality and another key leg to our business as a result of our entry into the Falkland Islands. Over the last seven years, our team has transformed the size and profitability of our business; the strategy we put in place in 2005 has delivered this growth.  The next three years will see a further transformation of the business as we increase production and generate significantly greater cash flows."

However, Premier said: “We recognise the need to update the portfolio as prospects are drilled out and as areas like the UK North Sea become mature.  This is why we have taken steps to add new areas in Kenya, Iraq, the Falkland Islands, deeper water acreage in Vietnam and the Mandal High area in Norway.  We believe in targeting play-opening opportunities which, on success, will deliver not just one discovery but will open up a series of prospects and leads.  Success in any of these areas would lead to multiple opportunities and reduced risk over time.  Such new acreage additions in 2012 were significant with a total of 30 new licences, amounting to net acreage gain of 11,800 km2.”



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