GDF leveraging UKCS infrastructure

August 1, 2012

French-owned utility group GDF Suez is stepping up its UK exploration and production operations with the goal of becoming a major player in the North Sea. The company's UK E&P arm has been involved in the sector for the past 15 years, but is now working up major expansion plans, as Meg Leitch reports.

The UK E&P subsidiary of GDF Suez has six projects at near-term development status, including the southern basin Juliet and Cygnus fields. It is also seeking operator status in the central North Sea and West of Shetland in the UK 27th licensing round. To support its planned expansion, the company recently opened a new office in Aberdeen, employing 120 people.

Outlining the company's plans at a London briefing last month, GDF Suez E&P UK managing director Jean-Claude Perdigues said: We are transforming the business and growing the organisation to become an operator of major projects, involved in exploration, development and production. We are focusing exploration and production around development hubs to leverage existing infrastructure, he added.

jean perdiguesWe are focusing exploration and production around development hubs to leverage existing infrastructure. Jean-Claude Perdigues

GDF has set its sights on building up a substantial portfolio, comprising existing operations in the southern North Sea, potential medium to long-term developments in the central North Sea and, still further ahead, prospects West of Shetland. GDF has high hopes for West of Shetland becoming a significant UK gas zone, said Andy Spencer, E&P UK subsurface manager.

gdf deccGDF recently secured DECC approval for the Juliet field (left), in UK block 47/14b while (right) Cygnus A will comprise three bridge-linked platforms for drilling, processing and accommodation and Cygnus B a wellhead facility.

Core growth

On the development front, GDF recently secured UK Department of Energy & Climate Change (DECC) approval for the Juliet field, in block 47/14b, which it regards as a key development in a core growth area. The field, discovered in 2008 with

well 47/14b-10, is expected to come onstream in 4Q 2013, producing 80mmcf/d of gas at peak. It will be developed with two horizontal wells tied back to the Perenco-operated Pickerill A platform via a 22km, 12in diameter export pipeline and control umbilical.

andy spencerGDF has high hopes for West of Shetland becoming a significant UK gas zone. Andy Spencer

From Pickerill, Juliet gas will then be exported through existing infrastructure to the Theddlethorpe terminal. Drilling is planned to start in 2Q 2013 with a rig sourced from a GDF Dutch affiliate and the ENSCO 80. Partner interests in the field are GDF (operator) 51.56%, First Oil Expro 29.44% and Hansa Hydrocarbons 19%.

In addition to Juliet, GDF is hoping for DECC approval shortly for the Cygnus field development, in blocks 44/11a and 44/12. First gas is scheduled for 4Q 2015, a year later than envisaged initially in a planned phased development, which was subsequently revised to a full-field approach in a second environmental statement.

Oonagh Werngren, newly appointed business manager, external affairs and supply chain, said: The schedule was revised as a result of the project's complexity and to ensure the end of the FEED phase produced a good understanding of the field. The company declined to reveal a capex for the development and said that because of the challenges presented by a large, shallowwater field, it was still honing costs. It acknowledged, however, that costs across the industry had been increasing, with rises of 20-30% in some cases. A tight rig market over the last 18 months or so was one contributing factor, the company noted, but added that singling out any other area in particular was difficult.

Cygnus, which GDF says will create 1000 direct and 3000 indirect jobs at the peak of construction, will comprise the Cygnus A complex three bridge-linked platforms for drilling, processing and accommodation and the Cygnus B wellhead facility, to the west. Gas will be exported to a tie-in point at Perenco's Trent platform and then to Bacton via the Esmond Transport System, in which GDF has a 22.5% stake. It is planned to drill 10 long horizontal development wells five from each platform.

A gas sales deal for Cygnus is not yet in place, but GDF doesn't envisage a problem on that front.

With estimated gross proven and probable reserves of 720bcf, Cygnus is the sixth largest UK gasfield in terms of remaining resources and is expected to account for 5% of UK domestic gas production at plateau in 2016. The field was discovered by Marathon in 1988/1989 and seemed at the time to be too small to be economically viable, partly because of its tight gas reservoir. However, GDF acquired the Cygnus licence in 2002 and subsequently drilled five successful appraisals. The company also believes there is upside in the field and it hopes to drill an exploration well with the ENSCO 80 in the northern part of the complex next year. Partner interests in Cygnus are GDF (operator) 38.75%, Centrica 48.75% and Bayerngas 12.5%.

oonagh werngrenThe [Cygnus] schedule was revised as a result of the project's complexity. Oonagh Werngren

Challenges and benefits

Elsewhere, in its development portfolio, GDF is also looking to advance the cross-border UK/Netherlands Orca gasfield and the borderline high pressure, high temperature Jacqui field, in the Central North Sea. Detailed design work on Orca is ongoing, with first gas looked for in 2014. The field is expected to be developed with a wellhead platform tied back to D/15, one of the GDF-operated Dutch sector blocks.

Orca contains modest volumes and ensuring an economically viable project is made more challenging because of the reservoir's 20% nitrogen content. Jacqui, in block 30/13b, is in a strategic position close to other potential prospects, such as the non-operated Josephine discovery, in block 30/13a, to the south. Appraisal drilling and initial development option screening studies are being carried out this year, with a view to firming up a concept by end-year.

Although the HPHT encountered in the central North Sea presents challenges, it also yields benefits in view of the size of potential discoveries, Spencer noted. Tesla, in 22/24c, represents a medium-level HPHT prospect at 14,000psi and well 22/24c-11 was drilled in 2009 in record time for its class, he said. Faraday, in 30/1a, is an ultra-HPHT prospect (16,000psi) and well 30/1a-11, in 2011, was drilled safely and on budget. The highest pressure encountered to date in the UKCS is in Jackdaw, at 17,000psi, where operator BG recently completed long-running appraisal 30/2a-8z. GDF is keen to progress the prospect towards development.

On the exploration front, in addition to the scheduled Cygnus well, GDF also plans to drill a well in the Juliet area in 2013-2014. In the central North Sea, the company is looking to drill wells in the Josephine, Taggart, Dalziel and Deep Jennifer prospects. It also plans a joint well with BP in the Marconi prospect, in block 30/1f; BP operates adjacent block 30/1c. West of Shetland, two wells are planned, probably in 2014, with the West Navigator in Dongoperated acreage. They are Glenrothes and Cragganmore, both of which have primary Palaeocene targets, which are expected to be gas-bearing. OE



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