The UK government announced a £90-million package to tackle emissions from homes and heavy industry

The package includes £70-million funding for two of Europe’s first-ever large scale, low carbon hydrogen production plants, the first on the banks of the Mersey, the second planned for near Aberdeen. A third project will develop technology to harness offshore wind off the Grimsby coast to power electrolysis and produce hydrogen. The remaining £20 million in the package is earmarked for projects aimed at cutting household emissions and bills through nine UK-wide local “smart energy” projects.  

“This is an important part of our world-leading efforts in eliminating our contribution to climate change by 2050 while also growing our economy, creating up to 2 million green-collar jobs across the country by 2030,” Kwasi Kwarteng, Minister for Business, Energy and Clean Growth, said.

Energy storage and demand side response (DSR) are crucial elements to ensuring the flexibility of the UK energy system while achieving the 2050 net-zero ambition, said Energy UK in a report published in partnership with The Association for Decentralised Energy (ADE) and BEAMA, the UK trade association for manufacturers and providers of energy infrastructure technologies and systems.

“We must continue to develop technologies and expertise to realise the potential benefits of a smart flexible energy system and the export opportunities for technologies, skills, and services,” the report says, urging the Government and Ofgem to work with stakeholders in the coming year “to address and remove the barriers to an efficient and transparent market in which providers of flexibility are rewarded and innovation is supported.”  

OGUK, the leading representative body for the UK’s offshore oil and gas sector, praised the interim report of Scottish Government-appointed Just Transition Commission for its call for greater engagement with the workforce and steps to ensure emissions reduction does not see high-quality jobs leave the country.   

“This report shares our industry’s focus on delivering a fair, inclusive and sustainable transition to a low carbon future. These findings confirm the need for continued partnership working with governments, regulators and our people to ensure that we can continue to support the UK’s diverse energy needs, the communities we work in as well as wider society,” said OGUK Chief Executive, Deirdre Michie, commenting on the report.

Energy consultancy Wood Mackenzie said at the end of February that the UK North Sea would see the largest decommissioning bill of any country over the next decade. More than £17 billion is expected to be spent on UK decommissioning by 2029, twice that of any other country, according to Romana

Adamcikova, Senior Research Analyst – North Sea Upstream at WoodMac.  

“With large hubs ceasing production and without new investment, we predict decommissioning spend will overtake cap-ex in 2025,” Adamcikova said.

Industry majors BP, Eni, Equinor, Shell, and Total assumed leadership of the Net Zero Teesside project, with BP as the operator. The project aims to be the UK’s first zero-carbon cluster, with the partners bringing the global experience of carbon capture, utilisation and storage technology. The project will decarbonise the local industry by building a transportation and storage system to gather industrial CO2, compress it, and store it safely in a reservoir under the North Sea.

“With the right government support the project has an ambitious yet achievable potential start-up date of the mid-2020s,” the partners said in a statement.  

In corporate contracts and news, Shell and Subsea 7 struck an agreement to speed up digital transformation in the subsea industry. As part of the deal, Subsea 7’s Life of Field business unit i-Tech 7 entered into a five-year collaborative technology agreement with Shell International Exploration & Production to accelerate subsea digitalisation.

“Digitalisation will support Shell to become a world-class investment case by improving our productivity, reliability and performance as well as reducing the costs of our assets,” said Christian George, Shell Vice President of Wells, Deep Water and Surface Engineering Technology.  

Solstad Offshore won a contact from Premier Oil for its PSV Normand Flipper for four wells firm plus options starting between May and June 2020. The contract is expected to last around 400 days supporting the jackup drilling rig Valaris JU-123 at Premier Oil’s Tolmount field in the southern North Sea.   

Premier Oil has also awarded DOF a contract for four wells firm, plus two well options for the Skandi Caledonia vessel with operations expected to begin in Q2 with an estimated duration of around 100 days per well for both the firm and optional wells.  

Wintershall Noordzee, a joint venture of Wintershall Dea and Gazprom EP International, has successfully started gas production from its operated cross-border Sillimanite field on the UK and Dutch Continental Shelves, Wintershall Dea said on 20 February.

Awilco Drilling announced in February that it had signed a letter of intent with Serica Energy to provide the WilPhoenix vessel for a one-well workover on the Rhum field, for a programme of between 45 and 70 days expected to begin between 1 September and 30 October 2020. The contract value is estimated at £5.9 million to £9.1 million.  

CNOOC Petroleum Europe Limited, a wholly-owned subsidiary of China’s CNOOC, has extended the contract with materials and logistics management company ASCO for another five years. The contract, which has options for a further six years, is worth over £100 million and includes ASCO supporting all the operator’s North Sea assets.

BP extended a contract with Vroon Offshore Services (VOS) Ltd for another three years. The contract extension is worth around £30 million, and under the deal, VOS will continue its exclusive provision of four high-performing vessels to support BP’s North Sea and West of Shetland assets until 2023.  

Independent Oil and Gas plc said on 28 February that the option held by its partner CalEnergy Resources Limited to buy 50% of the Harvey and Redwell licences had expired. Still, discussions continued as to CalEnergy’s potential participation in the two licences.  

Aberdeen-based offshore support vessel specialist Sentinel Marine has won a £36 million package of contract awards and extensions to operate its fleet of emergency response and rescue vessels (ERRVs) in the North Sea. Sentinel Marine won contracts with Chrysaor to support decommissioning activities in the southern North Sea and with Spirit Energy, which has chartered Biscay Sentinel to support the Borr Ran drilling rig in the Irish Sea. Sentinel Marine has also extended the contract for Mariner Sentinel, chartered to Equinor’s Mariner field, and for Forties Sentinel’s contract with INEOS. Forties Sentinel is currently tasked in the firm’s Breagh gas field in the southern North Sea in support of routine operations and drilling, Sentinel Marine said.

On 5th March, Premier Oil said it expected the last cargo from the Huntington field to be lifted in April 2020.

Babcock’s offshore business has won a new five-year shared contract with three oil and gas operators for helicopter transport in the northern North Sea, the company announced on 6 March. Babcock will initially operate over 100 helicopter flights each month from Sumburgh in Shetland, on behalf of CNR International, EnQuest, and TAQA, with flights expected to begin on 1 July 2020.  

Serica Energy said on 9 March that production resumed from the Bruce platform, after it had been halted at the end of January for engineering work to secure an unused caisson, found to be in a deteriorated condition.

“We are delighted that we have been able to restart production considerably sooner than we had initially predicted,” said Mitch Flegg, Serica Energy’s CEO.

“This work will have no negative impact on future production rates or on the ultimate recovery of reserves from Bruce, Keith and Rhum,” Flegg added.  

RockRose Energy announced on 10 March that the first of two infill development wells at West Brae, operated by RockRose who hold 40% had successfully completed and was delivering in line with expectations.

Tailwind Energy said on the same day it had submitted the environmental statement for the development of the Evelyn field in the Central North Sea. The first phase of development will consist of a single well, subsea tie-back to the Triton FPSO, with first oil expected by the end of 2022, Tailwind said.

In career moves, Neptune Energy said that Alexandra Thomas had joined the company as UK Managing Director, based in Aberdeen. Thomas joins Neptune from Tullow Oil plc, where she most recently held the position of Head of Exploration, Development and Commercial for Ghana.

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