Statoil’s Mariner field is largest UK offshore project in decade

15 January 2013

Statoil’s announcement in December 2012 that it would develop the Mariner Field in the UK sector of the North Sea with a total investment of over US$ 7 billion is the largest new offshore development in the UK in more than a decade. Pending final approval of the development plan by UK authorities, Statoil expects to start production from Mariner in 2017.

The field should produce for 30 years, with average production of around 55,000 barrels of oil per day over the plateau period from 2017 to 2020.

“We are satisfied that we now are able to make an investment decision for a profitable development of the Mariner field,” said Lars Christian Bacher, Statoil's executive VP for development and production, on December 21.

The UK government’s new offshore tax regime played an important role in the decision to proceed with Mariner, Bacher said.

"The Mariner project is a good strategic fit for Statoil. We are the world's largest offshore operator and have a portfolio of attractive projects in some of the most prolific basins in the world. The North Sea is a core area for Statoil, and we look forward to taking a leading role in further developing the UK part of this basin," he added.

An operating centre for the field will be located in Aberdeen, with more than 700 long-term full-time jobs created, 200 onshore jobs and 500 offshore.

The Mariner Field consists of two shallow reservoirs, the Maureen Formation and the Heimdal Sandstones of the Lista Formation, with nearly 2 billion barrels of oil in place and expected reserves of more than 250 million barrels of oil. Both formations yield heavy oil of around 12 to 14 API.

The heavy oil project will require pioneering technology in order to be developed. Since its discovery in 1981, the Mariner field has been subject to a number of development studies by different operators. Statoil became operator for Mariner in 2007 and its partners are Alba Resources, (part of Cairn Energy) and JX Nippon Exploration and Production (UK).

The field will be developed with a production, drilling and quarters (PDQ) platform, based on a steel jacket, with 50 active well slots, and a floating storage unit (FSU) of 850,000 bbls capacity. In addition a jack-up rig will be used for the first four to five years.

Because of the low well flow rates and early water break-through there is a need for many wells and a process designed to handle large liquid rates and oil-water emulsions. All production wells will have stand-alone sand screens and electric submersible pumps (ESPs) for lifting.

The contract award for engineering, procurement and construction (EPC) of the steel jacket has been issued to Dragados Offshore. The contract for the topside has been awarded to Daewoo Shipbuilding & Marine Engineering Co. (DSME).

Statoil has earlier awarded contract for heavy lift operations to Saipem in the UK. The contract for a floating storage unit (FSU) and a drilling rig (cat J) will be awarded in Q2 2013. Invitation to tender for contracts on risers, pipelines, umbilicals, flowlines, power cables and marine operations will be issued in December with planned contract awards in Q2 2013.

Welcoming the announcement, Mike Tholen, Oil & Gas UK’s economics director, said: “The largest offshore development in the UK for a decade, Mariner requires pioneering technology and will bring hundreds of high skilled, long-lasting jobs across the country, hundreds of millions of pounds in additional tax revenues as well as crucial security to our energy supplies.”

He added: “The approval of Mariner can in part be attributed to recent close engagement with the Treasury and the resulting tax changes aimed at boosting investment in a range of difficult fields including heavy oil projects.”