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BP awards UK companies over £1billion in contracts for key West of Shetland project

11 September 2013

BP announced on September 10 that it, and its partners, have now awarded over £1 billion in contracts to UK-based companies to provide services and equipment for the major re-development of the Schiehallion and Loyal oil fields to the west of Shetland. 

The project to redevelop the fields, which are operated by BP on behalf of its partners, involves two main elements: a brand new floating production, storage and offloading vessel and a major upgrade of the subsea infrastructure that will lie on the seabed.

The latest in a series of awards has been made to OneSubsea which has been awarded a £65 million contract to manufacture subsea trees at the company’s facility in Leeds. This follows awards during 2012 and 2013 to companies based in Aberdeen, Fife, the Wirral, Newcastle, Leicester, Bristol, Shetland and many other UK locations.

Trevor Garlick, BP’s Regional President for the North Sea, said “The UK-based subsea engineering industry offers great expertise and capability and is fully engaged in developing highly-advanced equipment that will ensure we maximise recovery from this field until 2035 and beyond. It is great to see more than 30 companies from all parts of the UK working together to contribute towards this important offshore project.”

Business Secretary Vince Cable said: “As I saw for myself at the Offshore Europe conference in Aberdeen last week, Britain’s oil and gas industry continues to thrive. Its expertise and innovation is impressive.

“Employing over 400,000 people and providing the majority of our energy needs, the Government’s industrial strategy will help keep this important sector growing.

“An important part of the strategy is reenergising the British supply chain. I want to create the conditions for the SMEs across the country to flourish in a highly-competitive global market. So it’s encouraging that the UK supply chain have played a major role in the development of BP’s Quad 204 project and I hope more will follow.”

OneSubsea will manufacture 11 “Xmas Trees” for the Schiehallion re-development. Fixed to the wellhead of a completed well, subsea trees are used on offshore oil and gas fields to monitor and control the production of a subsea well; they can also manage fluids or gas injected into the well.

Partners in the Quad 204 project are BP (36.3%), Shell (54.03%), OMV (4.84%) and Statoil (4.84%).
 
The Schiehallion and Loyal fields have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available, more than was originally thought. 
 
In July 2011, BP and partners announced their intention to invest around £3billion to re-develop the Schiehallion and Loyal fields. The investment will go in to new facilities that will enable production to be extended out to 2035 and possibly beyond.
 
The project involves replacing the existing Schiehallion Floating, Production, Storage and Offloading (FPSO) vessel with a new FPSO, which is scheduled to be installed in 2015. The new vessel will be 270 metres long by 52 metres wide and able to process and export up to 130,000 barrels a day of oil, and store in excess of 1 million barrels. There will also be a major investment in the upgrading and replacement of the subsea facilities to enable the full development of the reserves. 
 
The new facilities are scheduled to commence production in 2016. 

A brand new semi-submersible drilling rig – the Deepsea Aberdeen - is being built and will be dedicated to drilling on the Schiehallion and Loyal fields. 


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