Energy industry advisory and engineering consultancy Apollo has secured a contract thought to be in the region of £2 million from NEO Energy for a Front-End Engineering Design (FEED) study for the redevelopment project in the Greater Buchan Area.
NEO Energy, an Aberdeen-based firm, plans to repurpose and redeploy an existing FPSO vessel, currently used at the Wester Isles field in the North Sea, for the Greater Buchan Alpha Redevelopment.
Apollo's FEED study for NEO Energy, which is set to support up to 40 staff, will cover asset repairs and modifications for the FPSO, as well as late-life extension procedures, from a process and marine perspective.
In addition, Apollo said, there is a requirement for complex electrical infrastructure to be integrated into the vessel, ensuring the FPSO is ‘electrification ready’ and can accept power from renewable sources.
This will support the asset’s long-term sustainable performance and align to emission reduction targets set out in the North Sea Transition Deal and the UK Government’s Net Zero Strategy.
The news comes a day after UK-based oil firm Serica Energy said it had agreed to acquire a 30% non-operated interest in the UK North Sea licenses P2498 and P2170 which together make up the Greater Buchan Area (“GBA”), from Jersey Oil & Gas.
Completion is subject to regulatory, partner, and interested party approvals and is expected to occur early in 2024. Following completion, the partners in the GBA will be Serica Energy (UK) Limited (30%), NEO Energy (50% and operator) and JOG (20%).
The GBA encompasses several oil and gas accumulations some 150 km north-east of Aberdeen, in the Outer Moray Firth. The largest of these accumulations is the Buchan field which produced for over thirty years, ceasing production in 2017 owing to the end of the usable life of the floating production facility.
A phased development is envisaged involving the re-development of the Buchan field in Phase 1 and the possible development of the J2 and Verbier discoveries in Phase 2. Mid-case contingent resources from the Buchan field alone are estimated to be in region of 70 million barrels of oil equivalent, making it the third largest pre-development field in the UKCS. There are other discoveries and prospects in close proximity which might provide additional tie-back opportunities to the FPSO, Serica said.
Subject to project sanction and regulatory approval, the target for first production is late 2026. Peak production rates are expected to be around 35,000 barrels per day. Gross development costs are estimated to be in the order of £850-950 million, which under the current fiscal terms, are expected to qualify for tax relief at a rate of approximately 91%, Serica said.