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Maersk Oil CEO announced that the capital costs of its marquee Culzean HPHT gas project have been reduced by USD 500m as a result of higher drilling efficiency and robust upfront design and project planning.
Investment costs for the Culzean project are now forecasted to be around USD 4bn, a reduction of c USD 500m on the estimate at project sanction, CEO Gretchen Watkins outlined at the Maersk Group Capital Markets Day in Copenhagen.
A significant improvement of project capex has been achieved in close collaboration with partners, suppliers and the authorities. The present breakeven estimate for the project now stands at USD 33 per barrel of oil equivalent (boe) (including cost since sanction).
“This updated forecast reflects Maersk Oil’s commitment to world class project execution and our aim to continually improve our major capital projects, together with our partners and suppliers. Achieving cost reduction of 11% during project maturation, we are showing our ability to deliver greater value for investors and stakeholders through effective project delivery and controls,” said Watkins.
Culzean, a high pressure, high temperature gas condensate development in the UK Central North Sea was approved by the Oil & Gas Authority in August 2015. Since then, Maersk Oil and co-venturers BP and JX Nippon have worked together effectively and with suppliers to improve the project, supporting positive development in investment costs.
The improved forecast has been achieved through higher drilling efficiency, robust upfront design and project planning, supply chain deflation and supportive foreign exchange movements. Gretchen Watkins said,
“Improvement is largely driven by pulling the levers within our control to enhance Culzean’s project economics. Together with our position in the Statoil-operated Johan Sverdrup field development, Maersk Oil is committed to delivering the next generation of significant North Sea developments”.
Culzean remains on schedule to deliver first production in 2019.
• The Culzean field was discovered in 2008 • The field is expected to produce enough gas to meet 5% of total UK demand at peak production in 2020/21.• First gas from the field is expected in 2019• Resources are estimated at 250-300mmboe• Co-venturers in Culzean are Maersk Oil (operator – 49.99%), BP (32%) and JX Nippon (18.01%)• Photographs of project progress, the Maersk Highlander drilling rig on location plus animations are available to download at:
Web: brandcentral.maersk.com Username: Press Password: CulzeanUsername and password are case sensitive
Media enquiries:Jonathan MilneOffice: + 44 01224 242890Mobile: +44 07896 355370 (mob)Email: email@example.com
Maersk Oil is an international oil and gas company with operated production of over 500,000 barrels of oil equivalent per day. Our production comes from Denmark, the UK, Qatar, Kazakhstan, the US Gulf of Mexico and Algeria. Exploration and development activities are on-going in Angola, Norway, Kenya, Ethiopia, Greenland, Brazil, Kurdistan Region of Iraq and in the producing countries.
Turning complex and challenging fields into commercial successes has been the cornerstone of Maersk Oil’s business since 1962, creating enormous value for partners and host governments. We focus on pioneering technologies that enable us to develop difficult reservoirs. Our technical specialists are adept at solving upstream challenges by applying the right technology. We are committed to our Incident-Free ambition to protect people, the environment and our assets. We are an Equal Opportunities Employer.
Maersk Oil is a fully-owned subsidiary of the global conglomerate, the Maersk Group.
For more information about Maersk Oil, please visit the website at www.maerskoil.com.