Serica Irked by North Sea Rhum Delays
Serica Energy has run into "frustrating" delays in its plan to bring a third well on stream at the Rhum gas field in the North Sea, the London-listed company said on December 15.
The well was drilled by former operator BP but was never put into production. Serica, which assumed control of Rhum and other fields through a series of acquisitions last year, began intervention work at the R3 well in October, using Awilco Drilling's WilPhoenix semi-submersible.
"Progress has been slower than had been anticipated," Serica said, citing poor weather conditions that led to 11 days of downtime, and a technical problem with rig equipment that led to a further 28 days of inactivity. As a result, the work will not wrap up until late January.
Serica and its Iranian partner NIOC have some financial protection from these sorts of disruptions, as they pay a lower day rate for the rig in periods of inactivity due to weather and no day rate at all during downtime periods longer than 24 hours. Even so, Serica expects the cost of the intervention to increase by £3mn ($4mn) because of the setbacks.
"The delays to the Rhum R3 intervention project are frustrating but do not affect its viability or long-term value," Serica CEO Mitch Flegg said. "We are not prepared to take shortcuts, despite the slower than hoped progress, as we remain fully committed to a safe execution of the originally planned work scope."
Serica netted 24,100 barrels of oil equivalent/day of production at the Bruce, Keith and Rhum fields over the last three months, along with 2,200 boe/d of output at the Erskine field. The company also announced its formal award of rights to four new blocks in the vicinity of its Bruce hub, following the UK's 32nd licensing round.