Fairfield Energy and MCX Dunlin Limited (“MCX”) are planning to begin a Decommissioning Programme for the Dunlin field cluster in the northern North Sea, subject to the necessary regulatory approvals.
Fairfield acquired Dunlin, Dunlin SW, Merlin and Osprey fields from Shell and its partners in April 2008. MCX, a subsidiary of Mitsubishi Corporation, is the 30% working interest partner in the assets.
Production from all Dunlin cluster fields will shut down in mid-June 2015 prior to the start of a full decommissioning process which will be finalised and approved in consultation with The Department of Energy and Climate Change (“DECC”), the Oil and Gas Authority (“OGA”) and other relevant regulatory and industry bodies and stakeholders.
The Dunlin Alpha platform will remain fully manned and operational, continuing to export third party oil into the Brent system pipeline in the meantime. The phased decommissioning process is anticipated to take a number of years with high offshore activity levels maintained throughout, the company said in a press release.
The Dunlin field came on production in August 1978 with production peaking at approximately 120,000 bopd in 1979. It is located 500km north-northeast of Aberdeen within the East Shetland Basin and 11.2km from the boundary line with Norway. The Dunlin field cluster has produced over 522 million barrels over its 37 years of operation, extending the platform’s original 25 year design life by 12 years to secure substantially more reserves.
The Decommissioning Programme for the Dunlin field cluster has been in preparation for some time and in compliance with the relevant UK legislation and associated DECC guidance. The costs associated with decommissioning the Dunlin cluster fields will be approximately $600m (approximately £400m).
David Peattie, Chief Executive of Fairfield, said: “The Dunlin asset has now achieved maximum economic recovery. Taking into account the asset’s lifecycle, the depressed oil price and challenging operational conditions in the North Sea, starting the decommissioning process is the most appropriate action. Our investment programme has prolonged the life of Dunlin leading to a notable contribution to the British economy and the creation of jobs in North Sea oil and gas. We are fully committed to delivering a safe and transparent decommissioning process and will work closely with staff and stakeholders to achieve this.”