Case studies

Project: A fast track marginal field development

Location: West Don and Don Southwest (Don SW) in the UK North Sea

To develop marginal or mature fields such as West Don and Don Southwest (Don SW) in the UK North Sea inevitably present various technical, commercial and practical challenges. It takes the right combination of people, resources, experience and capital to achieve a low cost, fast track solution delivered in line with budget and ahead of schedule; and this is exactly what Petrofac and its partners achieved with the Don development.

Key facts

• Don SW and West Don fields are approximately 150 km northeast of the Shetland Islands
• water depth is approximately 500 ft
• fields were fallow until 2006 when Petrofac developed an economically viable solution
• three fields developed in tandem
• seven wells drilled; four production wells and three injection wells
• refurbishment and installation of a floating production facility
• installation of the entire subsea infield and export infrastructure
• first oil achieved from the West Don field on 28 April 2009, less than a year after receiving formal approval for the FDP
• Don SW produced its first oil at the end of June 2009

Using a flexible, fast-track design and integrated execution approach, Petrofac accelerated the development with minimum lead-in and reduced the time taken to reach first oil by six months.  First oil was achieved less than one year from field development plan approval.

Petrofac also negotiated an innovative commercial structure for use of the Northern Producer floating production unit, resulting in lease costs being pegged to production throughput and the cost of Brent Crude, aligning all parties to the goal of maximised production.

On 5 April 2010, in the first demonstration of the Group’s ‘build and harvest’ strategy, Petrofac completed the demerger of its Don Area assets, which were combined with the assets of Lundin Petroleum to form EnQuest PLC, an independent development and production company that subsequently listed on the London and Stockholm stock exchanges.

Petrofac’s investment in the Don project generated a capital gain of US$124.9 million and an internal rate of return from inception to demerger of approximately 35%, demonstrating the value of the build and harvest strategy.

We delivered Duty Holder facilities management to EnQuest on the Heather, Thistle and Northern Producer assets until the end of 2013, when EnQuest assumed operatorship of its assets.  Our relationship with EnQuest is strong and we continue to assist them on both existing and new facilities, through our Duty Holder Support Services model.