Energy Voice | Shell gives North Sea FID number 11 this year, six more to go, Woodmac says

Shell’s move to develop the Arran field took the North Sea’s FID tally to 11 for the year, and another six could follow before December 31, an analyst has said.

Lucy King, research analyst at Wood Mackenzie, said operators had committed to investing around £3 billion in development capex in the year to date.

Shell has taken over as operator of Arran, which will be developed as a subsea tieback to the oil major’s Shearwater platform.

Dana Petroleum and Zennor Petroleum have exited the project.

The remaining partners are Dyas UK and RockRose Energy.

Ms King said: “Sanctioning this at a time when development costs are lower results in a low breakeven, quick payback and provides a boost to the strategically important Shearwater hub and wider Central North Sea area. The OGA will be pleased.

“Both operatorship and partnership has been re-shuffled to drive this project forward – a good case study of assets in the right hands in action.”

Woodmac said Shell’s takeover as operator “reduces risk with the development” and consolidates the Anglo-Dutch giant’s position within the Shearwater area.

Ms King added: “This reaffirms Shell’s commitment to the North Sea – this is its fourth FID in the UK this year following Penguins, Alligin and Fram.

“Confirmation of Zennor’s exit is not unexpected – they are 100% in Finlaggan which is due FID by the end of the year. And they recently acquired interest in Britannia, which Finlaggan will tie-in to, so their focus is obviously elsewhere.

“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.”

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