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    Shell Takes UK Arran FID

Summary

This is the fourth one this year to boost the company's UK production base.

by: William Powell

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Natural Gas News, Europe, Corporate, Exploration & Production, Investments, News By Country, United Kingdom

Shell Takes UK Arran FID

Anglo-Dutch Shell has taken the final investment decision (FID) for the Arran gas and condensate field in the UK North Sea and assumed its operatorship, it said October 10. Its partners are Rockrose Energy and Dyas, which Rockrose bought in October, having already bought out Dana. Shell will have 44.57%, Rockrose Energy 30.43% and Dyas 25%.

At its peak, Arran is expected to produce around 100mn ft³/day of gas and 4,000 barrels/day of condensate, which combined equates to 21,000 barrels of oil equivalent/day, it said.

This is the fourth FID announcement in the UK North Sea in 2018, following the decision to redevelop the Penguins field in the northern North Sea, the Alligin field West of Shetland and the Fram field in the Central North Sea, it said, calling it further proof of its continuing interest in the UK.

"Arran is an important addition to Shell’s portfolio as we seek to strategically grow our central North Sea production around the Shearwater hub,” it said. The partnership will drill four new development wells and their output will be transported via a newly installed subsea pipeline to the Shearwater platform, which Shell also operates.

Consultancy Wood Mackenzie said the FID was "the 11th FID for the UK North Sea this year, and around £3bn ($3.9bn) in development capex has been committed to so far. We can expect up to six more FIDs before the end of the year.”

It said that "development costs are low, resulting in a low breakeven, quick payback and provides a boost to the strategically important Shearwater hub and wider Central North Sea area. The Oil & Gas Authority (OGA) will be pleased." The upstream regulator OGA is working to maximise the economic recovery of UK oil and gas reserves.... Now the asset is in the right hands to drive this project forward – "a good case study of assets in the right hands in action".

WoodMac added: “We could now see Serica Energy FID Columbus before the end of the year. Columbus will tie into the Arran to Shearwater pipeline and is contingent on Arran reaching key development milestones.”