Shell plans to drill 10 UK wells a year in expansion drive

London — Shell plans to drill 10 wells a year offshore the UK as operator over the next three years, including development and exploration wells, as it builds its North Sea hubs and looks for West of Shetland opportunities, its UK and Ireland vice president Steve Phimister said Wednesday.

Phimister said Shell had recently taken on three new drilling units and was "optimistic" about exploration both in the central North Sea and the West of Shetland area. The 10 wells a year to be drilled would be a combination of development and exploration wells, he said on the sidelines of a conference.

Europe's oil and gas majors are mostly focusing their UK operations on the less mature West of Shetland area, particularly with the departure of their US counterparts, but all retain assets in the core North Sea as well.

In the West of Shetland area, Shell could return to an operating role if opportunities arise out of its exploration acreage, in which it is mostly a junior partner to BP, but holds some licenses as operator, Phimister said.

Shell is a minority partner in all the main West of Shetland oil production hubs operated by BP -- Clair, Schiehallion and Foinaven -- and has a 30% stake in Siccar Point Energy's 100 million barrel Cambo oil project.

However, this non-operating role is a legacy issue rather than a point of principle, Phimister said. "We have some operated exploration areas in the West of Shetland. If operated opportunities come along for us, I would be interested."

Shell was "working hard" with Siccar Point to select a development concept for Cambo, and "looking for [project] sanction as soon as we can", he said.

Central North Sea plans

In the central North Sea, Shell aims to approve another gas and condensate project, known as Jackdaw, next year, involving a four-well development, Phimister said. It would supplement the Fram and Arran projects approved last year as part of Shell's Shearwater hub area, he said.

The company also plans exploration drilling near the Gannet and Nelson fields, also in the central North Sea, he said.

Shell is also interested in the possibility of increasing its 28% stake in Shearwater, which the company operates, but with BP holding an equal stake, Phimister said. "I am interested always to deepen [ownership] at the right price in my own core hubs," he said.

-- Nick Coleman, nick.coleman@spglobal.com

-- Edited by Dan Lalor, daniel.lalor@spglobal.com