BP starts up Seagull oil tie-in, boosting Forties volumes

BP on Nov. 6 announced the delayed startup of oil and gas production from Seagull, a tie-in of 54 million barrels of oil equivalent to the major's Eastern Trough Area Project hub, which in turn feeds Forties crude volumes.

At peak, output from the subsea development is expected to be 50,000 b/d of oil equivalent, comprising both oil and gas. Initial production will be lower: two of the planned four wells have been drilled so far, with production now coming from the first well. Drilling of the third and fourth wells is underway, a BP spokesperson said.

From the ETAP hub, oil from Seagull will be sent through the Forties system, with the crude loaded at Hound Point or delivered to Grangemouth refinery, while gas will be sent to Teesside via the Central Area Transmission System.

Production had been due on stream in the second quarter of 2023.

Forties crude, gathered from dozens of fields off Scotland's east coast, remains a mainstay of UK oil production and a component in Platts Dated Brent benchmark, used to price oil around the world. Platts is part of S&P Global Commodity Insights.

Forties loadings are expected to amount to around 225,800 b/d in December, up almost 40,000 b/d from November, according to a copy of the loading program seen by S&P Global.

Platts Dated Brent was assessed at $88.02/b on Nov. 3, down 51 cents on the day.

Rejuvenating assets

With Seagull approved for development in 2019, BP got regulatory approval in September for another ETAP tie-in known as Murlach. Murlach is expected on stream in 2025 and is somewhat smaller than Seagull, at 30 million boe of reserves.

The ETAP hub first came online in 1998, combining production from a cluster of fields: Machar, Madoes, Mirren, Monan, Marnock and Mungo.

The Seagull project was executed by privately owned upstream company Neptune Energy, with the facilities transferred to BP upon startup.

"A key focus for BP in the North Sea is to identify projects which can be developed efficiently using existing infrastructure. Seagull is a great example of this," BP's North Sea senior vice president Doris Reiter said in a statement.

"BP has been safely operating in the North Sea for nearly 60 years, delivering a reliable flow of energy, supporting thousands of jobs and a world-class supply chain. We plan to keep doing this by investing in our existing oil and gas infrastructure, like at ETAP,," she said.

BP holds a 50% stake in the Seagull license area, with Neptune on 35% and Japan's Japex on 15%. Neptune is in the process of being bought by Italy's Eni, with the sizeable Norwegian portion going to Eni's Norwegian joint venture Var Energi.

BP's comments came as UK Prime Minister Rishi Sunak pledged to enshrine in law a requirement for offshore licensing rounds to be held annually, as they were before licensing was suspended in 2020 ahead of the COP26 climate talks in Glasgow. The next round, the 33rd, opened in October 2022 after a more-than two-year hiatus, with the first awards made in October 2023.

Confidence in the upstream oil and gas sector has been badly damaged by two tax hikes in 2022 that lifted the headline rate to 75%, while the introduction of a notional price floor by which the hikes would be rescinded has done little to stem criticism.

Sunak's comments on the need to reinforce energy security have been blunted by forecasts of a win for the opposition Labour Party at the next election, with Labour viewed as more skeptical.

"The UK's oil and gas industry has an important role to play in the UK's energy transition," Sunak's office said. "Production from new gas and oil fields in the North Sea can be much cleaner than producing hydrocarbons from older existing fields, reducing the emissions impact of future production."