After BP crashed out of the TNK-BP Russian joint venture and sold off a load of its assets to fund compensation for the Deepwater Horizon disaster, it looked like the firm was eating some serious humble pie. But today it emerged that it is leading a consortium of other oil companies to invest £330m in an appraisal drilling programme (basically to find out if the area is viable) in the Atlantic.
If the appraisal shows that it is do-able, the new project would involve massive expansion of BP’s Clair oilfield, west of the Shetland Islands. But it is thought that the expansion could be enormous – enough to support up to 12 new wells. In total, Clair could contain up to eight billion barrels of oil, and given that the world uses about 90 million barrels a day, that’s 88 days’ worth. Yes, for the whole world.
The area has long been known to contain a lot of oil, but companies have avoided expansion there because difficult drilling conditions have made it uneconomical to bother. That area of the ocean has an extremely deep ocean floor, meaning specialist rigs are required to reach the bottom. In fact, the area has been so tricky that even though it was discovered 35 years ago, the first oil came to the surface as late as 2005.
But this time, BP executives are more optimistic about getting the stuff out in large quantities. North Sea regional president, Trevor Garlick, said: ‘If successful, the appraisal programme could pave the way for a third phase of development at Clair – this is now a real possibility.’ The other firms involved are Shell, ConocoPhillips and Chevron, but BP owns the largest stake at about 29% of the entire oilfield, so it is in for some serious cash if everything goes to plan.
Oil bosses are hoping to have five wells built on the expanded site within the next two years. If it turns out to be a ‘gusher’, it will be a welcome bit of good fortune for beleaguered BP.