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Lloyds List: Talisman buys Shell stake in Auk and Fulmar platforms

Canadian firm plans to develop satellites having gained control of virtually all assets in Clyde area, writes Martyn Wingrove
Feb 21, 2006
TALISMAN Energy has acquired Royal Dutch Shell and ExxonMobil's interests in the Auk and Fulmar oil production platforms in the UK central North Sea.
The Canadian oil firm intends to invest in both facilities to boost production and reduce operating costs.
The deal will see Talisman expanding its position around the Clyde area, where it already operates one platform, plus the Orion satellite and an interest in the Fulmar oil pipeline.
'This is a good business opportunity for us and is a continuation of our successful acquire and develop strategy in the North Sea,' said Talisman's president and chief executive Jim Buckee.
Talisman has agreed to purchase Shell and ExxonMobil's 85.8% interest in Fulmar and 100% in Auk, but remains tight-lipped on the price and other conditions.
The Fulmar and Auk platforms lie in central North Sea block 30'16 at the southern end of the UK's oil producing basins.
The Auk platform is more than 30 years old after being installed in 1975 – the field came on line in December of that year. It is currently producing around 7,000 barrels of oil per day.
Its oil is piped to Fulmar, which came on stream in February 1982 and is producing around 4,000 bpd. Both oil streams are exported to Teesside through the Norpipe.
Gas from Fulmar goes through a 290 km trunk pipeline to the treatment plant at St Fergus. Talisman will control the vast majority of assets in the Clyde area after this acquisition, with only Maersk Oil's Janice production semi-submersible close by.
The Calgary-based group will seek to gain efficiencies in offshore operations and will look to develop satellites to the platforms. Talisman has already drilled the Medwin field from the Clyde platform and could be interested in developing the nearby Hailey and Appleton discoveries through these facilities.
'The combined Clyde, Orion, Fulmar and Auk operations could yield a number of operating efficiencies,' said Dr Buckee. 'We believe redevelopment of the Auk field will deliver significant increases in recoverable reserves and production volumes.'
Shell put up for sale its interest in the platforms in April last year, when it also wanted to find a buyer for its Dunlin platform in the northern North Sea.
Meanwhile, the UK Department of Industry, which is yet to approve the Auk-Fulmar deal, has given the green light to four oil and gas projects so far this year.
In January the DTI sanctioned two incremental Nevis projects for ExxonMobil. This will involve more subsea wells tied back to the Beryl platform this year.
It also approved Venture's Goosander project in January, involving subsea wells tied into the Kittiwake platform.
This month the DTI gave Maersk Oil the go-ahead to develop the Dumbarton field, once known as Donan, with the Global Producer III floating production storage and offloading system.
Maersk Oil is moving the vessel from the Leadon field and has started development drilling work.
Maersk has also submitted new plans to develop the Affleck field in block 30'19a as a 28 km tieback to the Janice production facilities, south of Talisman's Clyde platform.
– ConocoPhillips is thought to have found hydrocarbons with its Finlaggan exploration well in block 21'5a and sees it as another potential satellite to the Britannia platform. The US oil major thinks it may need to drill an appraisal well into the new find in order to firm up reserves before moving ahead with a development programme.

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