Fairfield Energy in move to decommission oil platform

http://www.bbc.co.uk/news/uk-scotland-scotland-business-32672639

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Fairfield Energy has announced plans to decommission its Dunlin Alpha platform in the North Sea.

Production from all Dunlin cluster fields will shut down in mid-June ahead of the decommissioning process.

Dunlin Alpha will remain "fully manned and operational", exporting third-party oil into the Brent system pipeline in the meantime.

Fairfield cited the depressed oil price and "challenging operational conditions" as reasons for the move.

The decommissioning process, which requires regulatory approvals, is expected to cost about £400m.

The Dunlin field started production in August 1978, with production peaking at about 120,000 barrels per day in 1979.

The oil field is situated 300 miles north-east of Aberdeen in the East Shetland basin, just a few miles from the Norway boundary line.

It was originally operated by Shell but Fairfield acquired the Dunlin, Dunlin SW, Merlin and Osprey fields in 2008.

Earlier this year, Royal Dutch Shell began consulting on its plan to remove the first of the iconic Brent platforms in what will be the biggest North Sea decommissioning project to date.

Like the Dunfield field, it was originally projected to last 25 years but produced oil for 37.

The decommissioning of oil and gas installations in the UK sector of the North Sea could cost £40bn over the next 35 years.

According to industry body Oil and Gas UK, there are 113 oil platforms and 189 gas platforms in the UK Continental Shelf.

'Appropriate action'

Fairfield said its subsidiaries Fairfield Betula and Fairfield Fagus, along with joint venture partner MCX Dunlin, would launch the Dunlin decommissioning programme, subject to regulatory approvals.

The phased process is expected to take a number of years, with "high offshore activity levels maintained throughout".

Fairfield chief executive David Peattie 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."

Fairfield Energy is a UK-focused operator, with offices in Staines-upon-Thames, Middlesex and in Aberdeen.

Responding to Fairfield's announcement, WWF Scotland director Lang Banks said: "Having made massive profits over the years, it's only right that the oil industry cleans up its mess.

"In preparing its decommissioning plans, it's critical that the company takes all the necessary steps to ensure the marine environment is protected."