UK independent Siccar Point Energy has published details of its delayed 50,000 b/d Cambo oil project in the West of Shetland region, with development approval from the company and its partner Shell expected in the coming weeks.
The updated environmental impact assessment provides details of the project in remote waters on the edge of the UK maritime dividing line with the Faroe Islands, envisaging preparatory work at the site starting later this year, first drilling in 2022, and first production in 2025.
First-phase production is expected to peak at around 50,000 b/d of crude, plus 850,000 cu m of natural gas, with a productive life of around 25 years and the possibility of further phases.
With a public consultation closing July 10, a final investment decision on the closely watched project is expected in "mid-2021," according to regulator the Oil & Gas Authority.
Like other West of Shetland fields, Cambo crude is relatively heavy, falling outside norms for conventional North Sea crude and the Platts Dated Brent benchmark, with an API gravity of 22.8-24.6.
The project, in which privately owned Siccar Point holds a 70% stake with Shell on 30%, has been repeatedly delayed by oil price volatility and the pandemic, as well as its technical complexity.
It is closely watched as one of two major UK oil projects at an advanced stage of planning amid rising environmental pressure on the industry, including from the government, which hosts COP 26 climate talks this year and is targeting net-zero emissions and a phase-out of conventional cars.
The West of Shetland area has become a mainstay of the UK oil industry, but is largely the preserve of major companies such as BP due to higher costs and complexity, including harsh East Atlantic sea conditions, greater water depth and geological challenges such as basalt structures that impede seismic imaging.
Siccar Point and Shell have considered a joint development with the other major UK project on the drawing board, Rosebank, operated by Norway's state-controlled Equinor, but have opted for a dedicated cylindrical platform with loading directly onto tankers.
Climate scrutiny
The Cambo plans do not involve sourcing power from renewable sources, a focal point for the industry as it tries to develop plans to curb operational emissions, emulating Norway.
On June 8, Shell, BP, Total and independent Harbour Energy announced they are collaborating on a "high-level study project" exploring provision of power from external sources to installations in the North Sea that currently generate their own power from produced oil and gas. "The scope of the project is still under development and no decisions have been made," the companies said.
As for the Cambo proposal, the production vessel "has been designed to accommodate the installation of a future electrical infrastructure to facilitate electrical power import and eventual replacement (in whole or in part) of the proposed gas-turbine driven power and heat generation system," Siccar Point's statement said. "This could reduce direct emissions...by circa 95% from the point of electrification."
The statement did not specify the size of Cambo reserves, but Siccar Point puts these at 800 million barrels "in place," implying a lower figure for extractable oil.
Siccar Point is owned by London-based BlueWaterEnergy and US investor Blackstone. In February, it concluded a $200 million bond placement as part of refinancing needed to accommodate the project's drawn-out timeline.
