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Summary

Approval for Pierce Oil Field Development

Approval for Pierce Oil Field Development

Santos announced today that Enterprise Oil plc, as Operator, has received approval from the UK Department of Trade and Industry (DTI) for the development of the Pierce oil field in the Central North Sea.

First oil is planned in August 1998.

Discovered in 1975, the field has proven and probable reserves of 86 million barrels of oil and 250 billion cubic feet of gas.

The field lies in Blocks 23/22a and 23/27 in the North Sea, 280 km east of Aberdeen.

Project approval follows a 3 month Extended Well Test in 1996 which produced 1.17 million barrels of oil at an average rate of 15,000 barrels of oil per day.

Production is expected to commence at 20,000 barrels of oil per day, with a plateau rate of 45,000 barrels of oil per day being reached shortly after that. Field life is expected to be between 5 and 13 years.

The development plan comprises a leased FPSO (floating production, storage and offloading unit) with oil export via shuttle tankers. A series of contracts have been awarded to Statoil A.S. for the provision of both the FPSO and the shuttle tankers.

The total capital cost for the development is expected to be approximately 150m (A$340m). The cost of leasing the FPSO will be 100m (A$227m) over 5 years.

Santos Europe Limited has a 2.925% interest in the field. Its share of initial plateau production of 45,000 barrels of oil per day will be 1,300 barrels per day and its share of capital costs will be A$10m.

Gas reinjection to provide pressure support and to optimise oil production will be maintained for up to 5 years.

Development approval for Pierce follows the approval of the Banff Oil Field development project which was announced in February 1997. Anticipated first production from Banff, which is also located in the North Sea, is mid-1998.

Co-venturers in the Pierce field are:-

  • Enterprise Oil plc: 73.9922%
  • Ranger: 15.6000%
  • MOC Exploration: 3.7544%
  • Agip: 3.7284%
  • Santos: 2.9250%