The North Sea oil industry is often thought to be in decline, but a joint venture between BP, Shell, Chevron, and ConocoPhillips has just started producing oil.
The Clair Ridge field was first discovered in 1977. It was estimated to contain seven billion hydrocarbon barrels, but due to complex rock formations, it was believed it would be unfeasible to economically extract oil.
Now, decades later and following over £4.5bn of capital investment, the project is expected to produce up to 120,000 barrels a day for the next 40 years. BP’s upstream chief executive, Bernard Looney, said:
“And now more than 40 years after the original discovery, we have first oil from Clair Ridge, one of the largest recent investments in the UK. This is a major milestone for our upstream business and highlights BP’s continued commitment to the North Sea region.”
BP credits its LoSal technology for making the project possible. This oil recovery technology uses reduced salinity water for injection, which potentially increases cost-effective oil recovery over a reservoir’s lifetime.
Earlier this year, Shell also committed to expanding its Penguins oil and gas field in the North Sea, which it operates jointly with ExxonMobil, the maker of gas engine oils like Mobil Pegasus 1. Like Clair Ridge, the Penguins field was also discovered in 1977, but thought to be not economically feasible. With today’s technology, however, operator Shell now believes the field will be profitable even with oil prices below $40 a barrel.