UK and Norway

Cairn has built a strong position in the UK and Norway that provides a platform for mature basin exploration and future sustainable cash flow from development projects.

2017

First oil targeted in 2017 from development projects

~25,500 boepd

targeted peak production net to Cairn

Activity

Activity

Cairn has built a strong position in the UK and Norway by acquiring exploration, appraisal and development assets and participating in licence rounds.

Exploration

Cairn pre-qualified as an Operator in Norway in late 2015 and in H1 2016 was awarded the company’s first operated licence, PL 842 with the Storhaug prospect, in the Norwegian North Sea (Cairn 40% WI). In addition to the non-operated interests in four exploration licences awarded in the APA 2015 Licensing Round, Cairn was awarded three licences, including one as Operator, in the Barents Sea in the 23rd Licensing Round. Cairn believes that the Barents Sea has high potential for commercial oil discoveries. The Norwegian Petroleum Directorate state the yet to find potential in the Barents Sea at 8.8 billion boe and only ~100 wells drilled to date. We look forward to working with partners, Statoil, Lundin and PGNIG in the coming years.

In the UK North Sea, the Laverda exploration well, adjacent to the Catcher field, encountered 14 feet net oil bearing Tay sands, but did not encounter any indications of hydrocarbons in the deeper, high risk Slough prospect. The well was plugged and abandoned ahead of the rig continuing development drilling in the Catcher area (Premier Operator, Cairn 20% WI).

Developments

The Catcher and Kraken developments in the UK North Sea are targeting first oil 2017; targeted peak production net to Cairn of ~25,500 boepd.

Catcher

Catcher is targeting first oil in H2 2017. Further cost savings have been secured against the project estimates, with the release of contingencies as work scopes are finished and drilling activities are completed below budget. The Operator now forecasts capex to first oil of US$1.3bn and total project capex of US$1.8bn, a ~20% reduction on the original sanctioned estimates.

The subsea installation campaign remains on schedule for completion by Q4 2016: the flowline towheads and bundles, as well as the buoy and its mooring system are installed, and good progress is being made installing the risers. Six wells have now been safely drilled in the Catcher area, including most recently the first Burgman production well, with all meeting or exceeding pre-drill expectations for reservoir and fluid properties. Well sequencing has also been modified to avoid costly winter rig moves and work continues to evaluate the potential to reduce overall well count without impacting production.

The FPSO hull has now been delivered to the Keppel yard in Singapore while fabrication of the topsides modules is progressing well.

Kraken

Kraken development remains on schedule with first oil anticipated in H1 2017.  The latest capex estimate is >US$300m or over 10% lower than the sanction estimate.

In H1, Cairn acquired an additional 4.5% working interest in the Kraken development from First Oil plc bringing Cairn’s total working interest to 29.5%.

Good progress is being made on the FPSO in Singapore. All the topsides modules have been lifted onto the vessel and the completion and integration works are well underway. Sail away from the shipyard is expected before the end of 2016.

The 2016 subsea installation programme is nearing completion. The Drill Centre 2 (DC2) and DC3 production and water injection manifolds, DC3 flowlines, and all flexible risers have been successfully installed.

The drilling programme continues to make excellent progress. A total of three producer and four injector wells have now been safely drilled and completed, with results meeting or exceeding pre-drill predictions.

Skarfjell

Partners are currently investigating the best option for the development of the field and the decision on concept selection is expected to be made in Q4 2016. (Wintershall Norge AS, Operator 35% WI, Cairn 20% WI).

 

Key contact


Brita Holstad

Brita Holstad

Regional Director - UK & Norway

Contact

Stavanger Office

Jåttåvågveien 7
Block C, 2nd Floor
4020 Stavanger
Norway

T:+47 417 89 560

London Office

6th Floor
20 Berkeley Square
London
W1J 6EQ

T:+44 (0)207 647 0120