Siccar Point Prepares to Sanction Cambo Project

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Siccar Point Energy is preparing to sanction the UK Cambo project -- one of a potential new wave of lower-carbon greenfield oil projects in the West of Shetland area. "We have proactively taken significant steps to minimize the emissions footprint through its design and Cambo will be built 'electrification' ready with the potential to use onshore renewable power when it becomes available," said CEO Jonathan Roger. Siccar Point and partner Royal Dutch Shell aim to take a final investment decision in the coming months and start offshore development work this year. However private equity-backed Siccar Point intends to farm down part of its current 70% interest in the field ahead of project sanction. Shell currently holds 30%. Key Facts and Figures • Phase 1 of the project will target 50,000 barrels per day of medium 23°-25° API crude and 850,000 cubic meters per day (30 MMcf/d) of gas. • Development drilling will start in 2022, with first oil following in 2025. The field has an estimated 25-year production life. • Early field life emissions are estimated at 8 kilogram carbon dioxide equivalent per barrel of oil equivalent -- less than half the UK field average of 21.4 kg CO2e/boe. Low-Carbon Credentials As scrutiny of oil projects intensifies, low-carbon credentials will be essential to advance yet-to-be-sanctioned West of Shetland fields, such as Cambo, Equinor's Rosebank and BP's Clair South. The UK government is under mounting pressure from campaigners to clamp down on hydrocarbons and set an example ahead of UN climate talks to be held in Glasgow in November. Environmental campaigners urged the government this week to block development of Cambo on the grounds that it is not aligned with the UK's net-zero emissions goals. "If approved, fossil fuels would still be pumping out of the Cambo oil field in 2050 -- by which point the UK is supposed to have reached net-zero emissions. It would be completely indefensible if ministers were to approve this," said Friends of the Earth Scotland Campaigner Caroline Rance. The independent Climate Change Committee, which advises the government, said this week that policies should be set to reduce upstream emissions by 68% from 2018 levels by 2030 if the UK is to reach net zero. That’s more ambitious than the industry's own recent commitment to cut its operational emissions 10% by 2025, 25% by 2027 and 50% by 2030. Siccar Point recently resubmitted an environmental statement to the UK's oil and gas regulator, which is open for public consultation until Jul. 10. West of Shetland Energy Hub The West of Shetland area has largely been dominated by big oil and gas projects up to now, but there are plans to open up the area to renewable energy. "West of Shetland is being transformed into an energy hub, with the deepwater and high winds giving huge potential for both oil and gas and renewable developments, which are equally important to the energy transition over the next two decades,” said Roger. In addition to Cambo, new developments like Clair South and possibly Rosebank could be electrified by a connection to the 250 megawatt Viking onshore wind farm, according to Gunther Newcombe, coordinator of the Shetland energy hub scheme. "The earliest this could happen would be 2025 once Viking becomes operational," he told Energy Intelligence. Cerulean Winds is also interested in electrifying the West of Shetland area with floating wind power within a similar time frame (NE Jun.17'21). Siccar Point said it will minimize emissions at Cambo, for example by recovering all associated gas from oil production. There will be no routine flaring or venting of gas, and no diesel fuel will be used during normal operations. A planned fibre optic cable link to the shore will enable cost-effective digitalization to reduce emissions. Work is also under way to develop a methane leak detection and repair program in line with emerging best practice in the industry. Deb Kelly, London

Sanctions, Corporate Strategy
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