Premier predicts first oil from Shetland field by Xmas and progresses Falkland Islands prospects

premier oil workerEdinburgh-registered Premier Oil has confirmed that it is on track to pump its first oil by the end of next month from its Solan field, west of Shetland after spending $1.76 billion in pre-oil preparations and set-up.

A number of the critical path platform systems have now been successfully commissioned on Solan – including the firewater deluge system and other safety-related systems. As a result, all material construction work for first oil is now complete; the subsea infrastructure is now commissioned; and all the utilities including power, fuel supply and air are ready for first oil.

Tanker trials started this week and the Superior flotel is contracted to arrive on 20 November to replace the current Regalia flotel. Full habitation of the platform accommodation is expected when the Superior flotel arrives. The first pair of producer-injector wells required for first oil have been successfully tied in.

In the Falkland Islands, Premier continues to mature the development plan for the Sea Lion Phase 1a and pre-FEED work is now complete. The designs of both the FPSO and the Subsea System have evolved, tendering exercises have been completed and preferred contractors has been selected .

Premier will work with these contractors during FEED to finalise the fabrication plans for the facilities, and will also select the drilling and well service contractors. The explorer is also currently in discussions with its joint venture partner and the Falkland Islands Government to decide upon the start date and duration of the FEED programme.

In its trading update, Premier also confirmed that had achieved operating cost-reductions of more than 25% this year, with further cuts scheduled for 2016.

Tony Durrant, Chief Executive, commented: “Premier continues to benefit from stable production and valuable hedging contracts. Commissioning on the Solan project progressed well during good autumn weather and the field remains on track for first oil by year-end. Our Catcher project is also on schedule and on budget.

“Looking ahead, we see reduced capital expenditure and significant cost reductions for both our current and future projects to mitigate the current oil price environment.”

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