Oil production in the U.K. isn’t dead just yet, as BP (NYSE:BP) strikes a deal with Baker Hughes (NYSE:BKR) and Norway's Oldfjell Drilling to enhance production at the Clair Ridge heavy oil field following recent challenges to production.
BP will use the latest technologies and expertise from this new partnership to boost drilling in seven-billion-barrel Clair Ridge, the U.K.’s largest oil field. Initial aims include increasing output by 15 percent annually.
The Clair Ridge oilfield, which consists of two bridge-linked platforms, was developed in 2018 at a cost of $10 billion, with a projected output of 120,000 bpd of oil. Clair had an expected shelf life of around 40 years but hit production challenges last year, meeting only a third of its anticipated output levels in 2020.
BP operates the oilfield with a stake of 28.6%. Shell (NYSE:RDS.A), ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX) all also hold a stake in the field, with 28 percent, 24 percent and 19.4 percent respectively.
BP stated that the new partnership "aims to improve production across Clair, initially targeting a 15 percent increase in average annual production on Clair Ridge, the second phase development of the field. This will be achieved through drilling the best quality wells safely and more efficiently and harnessing the skills and expertise of each company in a single collaborative team".
Greater innovation and the use of new technology will allow BP to drill targeted wells to access the oil reserves more effectively. As crude oil in this region of the North Sea is much heavier than other lighter oil in other parts of the area it is harder to extract and will require the expertise of each company in the partnership for successful oil production.
