Orcadian Energy, the North Sea focused oil and gas development company, has received a “Letter of no objection” from the Oil and Gas Authority (“OGA”) in respect of the development concept for the Pilot field. This letter signals the finalisation of the “Assessment phase” and the entry into the “Authorisation phase” of development planning for the Pilot Field.
The letter acknowledges receipt of the Concept Select Report and subsequent Addendum (the “Concept Select Documents”), which were submitted in accordance with the OGA’s Requirements for the planning of, and consent to, UKCS field developments guidance:
The development concept for the Pilot field is based upon the use of polymer flooding to maximise economic recovery, implemented using an FPSO, two wellhead platforms and over thirty production and injection wells. Energy requirements for the development are to be largely supplied by a floating wind turbine unit supplemented by associated gas. This is as detailed in the Company’s Admission Document, and as amended by the submission of the CSR Addendum in July 2021, described in the announcement dated 15 July 2021.
The letter states that, based on the information provided to date and the OGA’s current understanding of that information, the OGA has no objection to Orcadian preparing a Field Development Plan (FDP) for the Pilot Field as described in the Concept Select Documents.
The facilities concept delivers a well optimised process heat management scheme and includes a local wind power system, with highly efficient backup gas engines, to significantly reduce emissions. Scope 1 and Scope 2 emissions over the life of field have been estimated, by the Company’s client engineers Crondall Energy, to be 2.6 kgCO2e per barrel, about an eighth of the North Sea average emissions in 2020: 20.0 kgCO2e/boe, and less than half of the lowest emitting oil facility currently operating on the UKCS:
The Company is preparing a plan to advance the FDP and progress the project through the Authorisation phase, with a particular focus on securing a contract for the provision of a FPSO (a floating production, storage and offloading vessel). As already announced the Company has engaged Crondall to assist with this and a short list of three providers have been identified (see announcement dated 28 October 2021). The Directors believe this vessel selection to be a crucial step in the process of finalising the basis of design for the rest of the development at Pilot and the commercial terms offered by the contractors will fundamentally define the capital requirements of the project. Further updates will be provided as appropriate.
Steve Brown, Orcadian’s CEO, said:
“The letter of no objection for the concept select study from the OGA is a really important step in the progress towards the development of the Pilot Field.
“This is also particularly pleasing for us given the extensive work that the team have done to address the net zero aspects of the development. We believe the plan that we have developed, once executed, will ensure that the Pilot Field emissions will lie in the lowest 5% of global oil production, an incredible achievement and one in keeping with the drive to net zero whilst continuing to ensure energy security in the UK.
“We look forward to continuing to work with the OGA and our other partners in taking this development forward.”