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News / BP pledges long term investment in region

OIL GIANT BP has re-affirmed its commitment to the west of Shetland with a multi billion pound investment plan.

During a short visit to Shetland on Wednesday, newly appointed head of BP’s North Sea and west of Shetland business interests, Trevor Garlick, said the oil province was still a good place to do business in despite the government’s recent tax hike.

BP and its partners are confident that within the next three months the UK energy minister will give the green light for phase two of the huge Clair field, around 50 miles north west of the isles.

The £3 billion investment would unlock a further 450 million barrels of crude from the field, which already feeds around 60,000 barrels a day into Sullom Voe Terminal as part of Clair Phase 1.

This follows on from an announcement earlier this summer that the oil company was to invest a similar amount of money redeveloping the Schiehallion field, around 100 miles west of Shetland.

Both Clair Phase 2 and the redeveloped Schiehallion are due to come on stream in 2016.

Mr Garlick said: “BP is investing heavily in the North Sea despite the recent tax increases. We have announced the investment into the redevelopment of Schiehallion, and we are working on some other projects that we hope to announce later in the year.”

Oil from the Schiehallion and Clair fields accounts for around half of the daily throughput of around 250,000 barrels handled by the terminal.

Mr Garlick said that Schiehallion oil would continue to be shipped to Shetland by the Loch Rannoch shuttle tanker until the end of 2013 when the floating production vessel would be taken off site while the field is redeveloped to extract a further 450 million barrels of oil.

Once a new production vessel is on site, probably by the middle of 2016, oil will continue to go through the terminal until 2017 or 2018 before a long term decision on its export route would be made.

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Terminal manager Lindsay Boswell said both Clair and Schiehallion were vital for the further well being of the terminal, which employs 200 BP staff plus around 300 contractors.

“Schiehallion is very important to the terminal. It is good news that the re-development is going ahead. We understand that Schiehallion will bring shuttle tankers to the terminal on start-up, but longer term we will have to secure that business.

“Clair is another major field out to the west of Shetland. At the moment the terminal handles Clair oil but Phase 2 will hopefully help secure the long term viability of the terminal.”

Mr Boswell added that management was keeping a close eye on the current industrial dispute between Shetland Islands Council and the oil port’s tug crews.

He said that while it was not his place to comment on the conflict, he warned that any possible strike action “wouldn’t help the reputation for strong reliability” at the port.

Mr Garlick also responded to concern voiced over the integrity of aging North Sea oil installations following the oil spill at Shell’s Gannet field, 113 miles east of Aberdeen.

The North Sea regional president said the company was committed to a long term programme of maintenance.

“We are running a mature business in the North Sea now. We have been spending a lot of time and money over the last few years on inspection, surveys, repairs and replacement, and that is to be expected at this time in the basin’s history.

“It is an important part of our programme to spend time and money on asset integrity, not least so that we can lengthen the life of the fields that are out there,” Mr Garlick said.

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