Schiehallion update

OIL GIANT BP has said that it has awarded more than a £1 billion in contracts to UK based companies as part of its £3 billion redevelopment of the Schiehallion and Loyal oil fields, west of Shetland.

The project involves replacing the existing Schiehallion Floating, Production, Storage and Offloading vessel with a new 270 metre FPSO, and upgrading the subsea infrastructure.

Both fields first came on stream in 1998 and have since produced around 400 million barrels of oil.

BP said that around 450 million barrels still remained to be recovered over the next 20 years, much more than originally estimated.

Once the redevelopment is completed by 2016, oil will initially be brought to the Sullom Voe Terminal by shuttle tanker, as it has been done for the last 15 years.

However, the long-term future of this arrangement is far from certain, as the terminal will have to compete for the business with other export options.

BP operates the two oil fields on behalf of its partners Shell, OMV and Statoil.