BP signs oil engineering contract for Clair Ridge drilling project

Thursday, 02 February 2012 12:58

News & Events - Engineering News

February 2, 2012

BP recently announced it had forged an agreement with an oil engineering firm that will allow it to move forward with the second phase of the company's project near the Shetland Islands.

BP said this week it would work with Subsea 7 to continue its development of its massive Shetland Islands project. Officials from BP's Exploration Operating Company said they awarded the contract to Subseat 7, an oil engineering, construction and services contractor that specializes in the offshore energy industry, because of the company's expertise in advanced petroleum engineering.

Subsea 7 will produce new pipelines for the Clair Ridge drilling project for BP. The London-based oil giant has invested significantly in its Shetland Islands project, and executives said Subsea 7 would construct the new piping system where the North Sea and Atlantic Ocean meet. Subsea 7 affirmed it will create an oil export pipeline and a gas export line that will tie into BP's new production facilities at the site.

British officials have trumpeted BP's oil project just west of the the Shetland Islands as a boon to the nation's struggling economy. BP and its partners - which include Shell, ConocoPhillips and Chevron - are investing an estimated $16 billion into the project, according to the BBC. Subsea 7 will help BP as it expands production capacity at the site, which oil engineers contend holds vast stores of fossil fuels.

The substantial investment into the Clair Ridge oil fields underscores a shift in strategy among major oil companies, experts say. Oil giants such as BP and Exxon Mobil spent huge amounts of money in the past in search of untapped oil and gas fields. However, emergent technologies are allowing companies to maximize fossil fuel recovery from their existing drilling wells, according to BP chief executive Bob Dudley.

"Although it began over 40 years ago, the story of the North Sea oil industry has a long way yet to run," he said. "After some years of decline, we now see the potential to maintain our production from the North Sea at around 200,000-250,000 barrels of oil equivalent a day until 2030."

BP plans to carry out its ambitious oil engineering project in the North Sea in four discrete phases, The U.K. Press Association reports. Subsea 7 will play a crucial role in the second such stage of development.

"We are pleased to be awarded this major pipeline project by BP, which builds upon our unique bundle technology," Subsea 7 vice president Steph McNeil said in a statement. "Fabrication will take place at our Wick facility in Scotland, which has a proven track record of successful bundle design, fabrication and installation, securing work for approximately 100 people. We look forward to helping bring on-stream the Clair Ridge Project in an efficient, timely and safe manner."

BP estimates the oil project will take another five years to complete, but Dudley noted that at its peak, it would add 3,000 oil and gas supply jobs and serve as a continued driver of job growth at the company's North Sea oil operations. Scottish Secretary Michael Moore said that the investment illustrated the continued success of UK oil fields.

"This major contract underlines the confidence of the oil and gas sector and world-leading engineering firms with bases in Scotland. The construction of the pipeline is an essential step in opening up the considerable potential of the west-of-Shetland field," he said. "The contract award to Subsea 7 is just the latest piece of good news for the UK's oil and gas sector and its supply chain in Scotland."