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Maersk Oil said on Thursday that it had launched drilling operations on the first production well in the Culzean gas field in the UK area of the North Sea.
The well will be the first of six production wells that will be drilled, with continuous drilling planned to take place in the next five years. Maersk Oil expects first gas to be produced from Culzean—one of the largest new fields discovered in the UK North Sea in more than a decade—in 2019.
Maersk Oil-operated Culzean has resources estimated at 250-300 million barrels of oil equivalent. Once production begins, it is expected to continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day.
“This is an important milestone in ensuring that we can deliver Culzean on schedule, and with it 5% of UK gas demand in 2020/21,” Gretchen Watkins, Maersk Oil’s CEO designate, said in the company statement.
More than 30 UK-based well services companies will support the drilling campaign.
Maersk Oil, together with its co-venturers, JX Nippon and BP (NYSE:BP), is investing about US$4.5 billion in the field 145 miles east of Aberdeen, whose development was approved by UK Oil & Gas Authority in August of last year.
In May of this year, BP doubled its interest in the Culzean development from 16 percent to 32 percent as part of BP’s five-year/US$10 billion investment program.
Maersk Oil, which is splitting from its parent, Danish logistics conglomerate AP Moeller Maersk, is well-placed to not just survive but thrive after the move, according to analysts. The spin-off decision has been prompted by Maersk’s strategy of maximizing shareholder value by focusing on its core transport and logistics business.
The Danish company said at the announcement of its plans that the split will take place over the next two years and might see its oil and gas, drilling, tanker, and supply vessel businesses split off either individually or all together, via joint ventures, mergers, or listings.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.