July 13, 2011 - 11:00 am (CET)
- Investment of approximately EUR 3 bn by the Schiehallion joint venture
- Re-development will prolong production out to 2035 and possibly beyond
- Estimated 325 mn bbl of resources are still available
OMV, the leading energy Group in Central and Southeastern Europe, announces the agreement to progress a major re-development of the Schiehallion oil field to the West of Shetlands. The Schiehallion joint venture investment of approximately EUR 3 bn represents a significant vote of confidence in the long-term potential of this important oil field. Schiehallion has produced over 300 mn bbl since production started in 1998 and an estimated 325 mn barrels of resources are still available. The re-development of the field will take production out to 2035 and possibly beyond.
Jaap Huijskes, member of the OMV Executive Board responsible for Exploration and Production (E&P) stated: "This is a major milestone which is consistent with OMV’s strategy to develop and sustain a material, high quality business in the West of Shetlands region. The Schiehallion oil field is an established, high value asset with a strong future and this significant step will maximise the greater potential we see in this field."
The Schiehallion joint venture has gained extensive experience in the West of Shetlands over the past two decades and will use the latest technology to maximise recovery from this field. The project involves replacing the existing Schiehallion Floating Production, Storage and Offloading (FPSO) vessel with a new FPSO vessel which is scheduled to be installed in 2015. The new vessel will be 270 m long and 52 m wide and shared by the Schiehallion and Loyal field owners. It will be able to process and transport up to 130,000 bbl/d and store in excess of 1 mn bbl. There will also be a major investment in the upgrade and replacement of the subsea facilities to enable the full development of the reserves and potential drilling of additional wells. The new facilities are scheduled to commence production in 2016.
Balanced international E&P portfolio
In Q1/2011, OMV’s oil and gas production was 304,000 boe/d. Its proven reserves were about 1.15 bn boe at year-end 2010. In its core countries Romania and Austria, OMV is focusing on reducing the natural decline and on enhancing the recovery rates from mature fields. Future growth is expected to come via new field developments, exploration and acquisitions internationally. OMV intends to grow the existing portfolio to and beyond critical mass, on a production per country basis, and is looking to find new growth areas within the Caspian, Middle East and North Africa regions where OMV can leverage on its existing E&P exposure.
Schiehallion joint venture
OMV (U.K.) Ltd 5.88%
BP (Operator) 33.35%
Hess Ltd 15.67%
Murphy Petroleum 5.88%
Statoil (UK) Ltd 5.88%
The new FPSO will be shared by the Schiehallion and Loyal field owners in approximately 82%/18% shares. The Loyal field owners are BP (Operator, 50%) and Shell (50%).
FPSO vessels receive oil and gas from wells on the sea floor, process it using equipment on the deck, store the oil in tanks located in the hull and export the gas via a pipeline to shore. The crude oil is regularly collected from the FPSO vessel by tankers.
OMV (U.K.) Ltd
OMV (U.K.) Ltd, a wholly owned subsidiary of OMV Aktiengesellschaft, has been active in the UK for over 20 years with an office in London. OMV UK is operator of eight licences and participates in 28 non-operated licences. Its core activities are focused on the Central North Sea and West of Shetlands where it has built a substantial position for future development.
With Group sales of EUR 23.32 bn and a workforce of 31,398 employees in 2010, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. In Exploration and Production, OMV is active in two core countries Romania and Austria and holds a balanced international portfolio. OMV had proven oil and gas reserves of approximately 1.15 bn boe as of year-end 2010 and a production of around 304,000 boe/d in Q1/2011. In Gas and Power, OMV sold approximately 18 bcm of gas in 2010. In Refining and Marketing, OMV has an annual refining capacity of 22.3 mn t and as of year-end 2010 approximately 4,800 filling stations in 13 countries including Turkey. In Austria, OMV operates a 2,000 km long gas pipeline network with a marketed capacity of around 89 bcm in 2010. With a trading volume of around 34 bcm in 2010, OMV’s gas trading platform, the Central European Gas Hub, is amongst the most important hubs in Continental Europe. OMV further strengthened its position through the ownership of a 96% stake in Petrol Ofisi, Turkey’s leading company in the retail and commercial business.
Under its 3plus strategy, OMV combines the strengths of its E&P, G&P and R&M business units in order to ensure that it provides the best possible supply service to its three core markets of Central and Eastern Europe, Southeast Europe and Turkey. OMV uses the synergies that result from the combination of these strengths to extend its supply chain from oil and gas through to electricity and eventually renewable energy.
OMV is a signatory to the UN Global Compact, and an active supporter to the values enshrined in its Code of Conduct. These include a strong sense of responsibility towards the social and natural environment, especially in economically weak regions. OMV continuously addresses economic, environmental and social issues related to its business in a responsible manner. The company reports on its activities in a sustainability report in accordance with the Global Reporting Initiative Guidelines.