EnQuest: Kraken under budget. First oil in second quarter

EnQuest, a UK North Sea oil firm, has confirmed that the Kraken field FPSO has arrived in the North Sea and that the project remained under budget.

The Kraken, to be developed using the Armada Kraken FPSO, is a large heavy oil accumulation located in the East Shetland basin, to the west of the North Viking Graben some 125 kilometers east of the Shetland Islands.

In an operational update on Tuesday, the company confirmed the FPSO had arrived at the North Sea region on schedule in January.

EnQuest CEO Amjad Bseisu said: “The Kraken development remains under budget and on schedule for first oil in Q2 2017.”

Since Offshore Energy Today last week reported on the Armada FPSO arriving in Rotterdam, we’ve reached out to EnQuest asking if the latest update meant the FPSO is now at the final location offshore the UK.

Responding, an EnQuest spokesperson said in an e-mail that the handover of FPSO systems from commissioning to operations was ongoing and would continue in Rotterdam “where the Armada Kraken is currently undergoing inspection and certification before hooking-up to the STP buoy mooring system, risers, and umbilicals.”

Asked about the expected date for the FPSO deployment at the Kraken field, the spokesperson only said that EnQuest’s next scheduled market update on its operations generally would be with the publication of its 2016 full year results on 21 March, hinting that more info on the Kraken project might be revealed at that date.

The Kraken FPSO vessel can handle a peak fluid rate of 460,000 barrels per day (bpd) and 80,000 barrels of oil per day (bopd), 275,000 bpd of water injection, 20 million standard cubic feet (MMscf) of gas handling and has a storage capacity of 600,000 barrels.

Highest annual production

In Tuesday’s update, EnQuest said that its overall production in 2017 would average in the range of 45,000 barrels of oil equivalent per day (boepd) to 51,000 boepd for the full year and would be dependent on the timing of first oil from the Kraken field.

The production for 2017 is expected to be higher than last year which is in line with the increase in production in 2016 when compared to 2015. The company averaged 39,751 boepd in 2016, 8.7 percent more than in 2015, with production in the UK part of the North Sea up by 11.3 percent. This was EnQuest’s highest annual production since the company started in 2010.

The company added that it was still on course to further reduce average unit opex in 2017. The range of $21/bbl to $25/bbl will include Kraken production for which the company believes will have operating costs in the low $20s per barrel once it is fully on-stream. The final reported opex for 2016 was at the lower end of latest full year guidance range of $25/bbl to $27/bbl.

Capex has been reduced for 2017, but the majority of it will still be invested in the Kraken field. Cash capital expenditure for 2017 is expected to be in the range of $375 million to $425 million, compared to the 2016 capex of around the lower end of the $620 million to $670 million range.

Offshore Energy Today Staff