Page 5 - NorthAmOil Week 25

NorthAmOil COMMENTARY NorthAmOil
production was anticipated to last 18 years, bringing the partners total revenue of roughly $11.3 billion.
Full development of the field will require additional phases. Indeed, Navitas said it was exploring the potential of developing the Buck- skin South reservoir, which could hold an addi- tional 259 million barrels of oil, together with LLOG.
e eld has been estimated to contain nearly 5 billion barrels of oil in place.
Independents’ day
LLOG’s start-up of Buckskin is also notable because it marks the rare presence of an inde- pendent operator in the Lower Tertiary, which is otherwise dominated by super-majors. ese larger players have deeper pockets and are more willing to take on the risk of targeting ultra-deep- water prospects. Indeed, the Buckskin project was previously operated by Chevron, but the super-major abandoned it in 2015. Operator- ship was then handed over to Repsol, which remained a partner in the project when LLOG took over in 2017.
Also in 2017, LLOG took on the operator- ship of the Moccasin discovery, abandoned by Chevron at the same time as it walked away from Buckskin, in a lease sale. And, in April 2018, LLOG became operator of the Shenandoah dis- covery in the Lower Tertiary, taking over from Anadarko. e company said at the time that it envisioned using a oating production system (FPS) to develop Shenandoah.
Moves by Chevron and Anadarko to step back from exploration of the Lower Tertiary were seen as a negative for the Gulf initially. But now, it appears that other operators still view the region as having considerable potential that is worth tapping even amid ongoing oil price vol- atility. e cost reductions achieved at Buckskin will be a welcome sign that even complex Lower Tertiary projects can be developed more cheaply than previously thought.
Meanwhile, Chevron has not stepped away
completely, and remains active in the Lower Tertiary alongside other super-majors. The company recently moved into the front-end engineering design (FEED) phase at its Anchor discovery in the Lower Tertiary. And in late May it was reported that Chevron had selected Kiewit O shore Services as the preferred bidder to build the topsides for the Anchor platform. A nal investment decision (FID) is expected this year or next. e planned Anchor platform would have the capacity to produce 75,000 bpd of oil and 28mn cubic feet (792,960 cubic metres) per day of natural gas, making it one of the larger projects to be sanctioned in the Gulf in recent years. First production is currently targeted for 2023 or later.
What next?
For LLOG, the next steps will be to focus on Repsol’s Leon discovery, as well as further devel- oping Buckskin in additional phases. e two companies announced in late April that they had entered into an asset exchange and joint par- ticipation agreement focused on the deepwater Gulf. Under the agreement, LLOG took over the operatorship of Leon, while Repsol acquired a 30% stake in Moccasin.
“The initiation of production at Buckskin marks a signi cant milestone for LLOG consid- ering the scope of the eld and its position as our rst deepwater development in the Lower Ter- tiary trend,” LLOG’s president and CEO, Philip LeJeune, said.
“LLOG is looking forward to developing future phases of the project and embarking on additional opportunities in the Lower Tertiary. Later this month LLOG will spud a delineation well at the Leon discovery with the goal of bring- ing it to development in the near future.”
If LLOG, Repsol and their partners are able to succeed in the Lower Tertiary, including by cut- ting the costs of new developments, other inde- pendents will be more inclined to follow them into the region. Such moves would also be more likely if oil prices stabilise.™
The Buckskin project was previously operated by Chevron, but the super-major abandoned it in 2015.
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