Innovative Contracting = Fresh Lease on Life

“We saw a new market opportunity emerging and that was taking on the responsibility for producing assets by becoming duty holder,” says Gram, who has played a pivotal role in establishing a subsidiary of Aker Solutions specifically to pursue such opportunities.  “We set up the company in 2003 and the first contract secured was with Total on the Frigg field, though we didn’t get as far as being responsible for the operation itself.”

“It was at a presentation about Aker Solutions in February 2004 that I began talking with Alf Frugaard, Asset Manager for Triton, Hudson, Fife Area, Amerada Hess UK floating production assets. We talked for some hours into the evening about the duty holding idea and three months later he called me. We then had a further meeting about it. That was the start of the Field Life Extension Plan.”

Brilliant North Sea workhorse

At the time, Amerada Hess was considering how best to continue with AH001. The challenge was made all the tougher as the platform was a low-cost solution at the outset, initially for developing the modest Rob Roy/Ivanhoe reservoirs only. It was expected to recover reserves of some 80 million barrels (13 million m³) from the UK continental shelf (UKCS) block 15/21 fields over a period of about 10 years, with first commercial oil flowing in July 1989. Instead today, more than 180 million barrels (29 million m³) and 15 years later, the floater is still at work, with several million more barrels yet to play for.  

Given that AH001 has been a tremendous success all along, the challenge for Amerada Hess’ UK Operations Production Manager, George Hubbard, is to realise that remaining prize as part of a wider ambition for the U.S. independent’s North Sea portfolio. “What we’re doing now on the UKCS is looking at reserves carefully – where we can add value and where we can make the production of hydrocarbons even more cost-effective. In that respect, the AH001 fits beautifully. We’ve already considerably extended the life of Rob Roy and Ivanhoe; we had been looking at abandonment in 2005. Now we’re talking 2007-2008 and a recovery rate from the reservoir in excess of 71 percent.”

 “What we’re trying to do is find ways of continuing the profitable life and extracting the full value of the asset,” says Hubbard. “We think the reservoir is very well understood and it offers no further potential. Also we’ve worked hard to see if there is anything else to tie back to the AH001 or further exploit the (Upper Jurassic Piper) reservoir, though the answer to that appears to be no.”

Historically, AH001 has been owner-operated,