Philippe Guys, Managing Director, Total E&P UK
“In such a mature basin as the UKCS, we no longer expect to discover large new ‘elephant’ fields, and many new discoveries will be relatively small. However, by connecting them into our existing infrastructure and, therefore, being able to develop the fields quite quickly and with minimal complexity, we can make these smaller discoveries economic,” states Philippe Guys, Managing Director at Total E&P UK.
Since restarting in March 2013, production from Total’s Elgin-Franklin field in the UK North Sea has been about half what it was before a gas leak in 2012 shut operations for a year. What are your expectations for 2014?
I should perhaps begin by saying that the gas leak on our Elgin platform in March 2012 served as an important reminder to all of us that risks in this industry are ever present. Fortunately, the platform’s design and in-built safety features, with our highly trained and well-drilled personnel, combined with our comprehensive emergency procedures, ensured that no one was injured and the environmental impact was minimised.
After reviewing our well integrity criteria and having a revised safety case accepted, we have now resumed production but on a limited number of wells, which is why current production is about 50 percent of the pre-incident levels. This year will see us gradually ramping production back up towards the pre-incident level of 120,000 barrels of oil equivalent a day (boe/d), which we expect to achieve in 2015.
What are the major steps being taken to reach that level?
In addition to the two drilling rigs that are working to secure various Elgin-Franklin wells that do not match our tougher new well integrity criteria, we are bringing in two additional drilling rigs to start work on new development wells, which will obviously increase production in due course.
We have also invested more than £1 billion (USD 1.67 billion) on two new platforms, West Franklin and Elgin B, which respectively will give us an extra 9 & 12 High-Pressure/High-Temperature (HP/HT) wellheads. Obviously, this will also significantly enhance production. The production design rate of the West Franklin platform is 40,000 boe/d and for Elgin B is 65,000 boe/d.
Elgin-Franklin has already produced 700 million barrels of oil equivalent, with a further 500 million remaining to be extracted over the next two decades. So the field has plenty of productive life left.
Total plans to spend about $20 billion (USD 33.30 billion) in the North Sea over five years. How much of this will be spent in the UKCS and where will this money be focused?
Our current annual investment on the UKCS is around £2 billion (USD 3.33 billion), £1.3 billion (USD 2.16 billion) of which is in capex and the remaining £700 million (USD 1.17 billion) of which is opex and exploration activities.
An Economic Report last year from the industry trade body, Oil & Gas UK, showed that total capex investment on the UKCS was expected to reach an all-time record of £13.5 billion (USD 22.48 billion). This suggests that Total itself is currently investing 10 percent of the UKCS entire capex.
Over the past three years our biggest single investment has been on our Laggan-Tormore development, the first gas infrastructure project in the West of Shetland region. This £3.3 billion (USD 5.49 billion) project will open up this frontier region and pipe gas via Shetland to the UK mainland. Laggan-Tormore is likely to make Total the UK’s biggest producer in 2015, when output is estimated to reach 200,000 boe/d.
With such an ambitious exploration program, how do you ensure the best balance between exploring and producing?
If our geoscientists provide geological data that suggests a commercially viable prospect with exploitable reserves, we will go for it. Naturally, we can never know for certain whether oil or gas is present until after an exploratory well has been drilled; but, so far, Total’s exploration success rate on the UKCS has been very good.
In 2012, around USD 2.8 billion was invested on global exploration activities by the Total Group, of which 10 percent was expended on the UKCS. This is quite significant considering that Total has exploration and production activities in more than 50 countries.
On the UKCS, Total has focused its activities around three production ‘hubs’: the Northern North Sea, Central Graben and now the new West of Shetland region. We will continue working around these hubs, extending their life through targeted exploration, improved seismic techniques and the effective application of new technologies. In such a mature basin as the UKCS, we no longer expect to discover large new ‘elephant’ fields, and many new discoveries will be relatively small. However, by connecting them into our existing infrastructure and, therefore, being able to develop the fields quite quickly and with minimal complexity, we can make these smaller discoveries economic.
Such an ambitious program would not be possible without advances in offshore technology. What is it that sets Total apart in terms of technology?
One example is what we have done at Elgin/Franklin where, as operators, we have met some exceptional challenges, made groundbreaking achievements and set the global standard for future HP/HT temperature developments throughout the world.
Another example of how we have broken new technological ground is our Islay field, which is part of the greater Alwyn area. Islay is the first offshore field in the world to feature electrically trace heated pipe-in-pipe. This innovative technology helps to achieve flow assurance by avoiding pipeline blockages due to wax or hydrate formation. It significantly reduces the operational costs and improves production operability in shallow and deepwater fields.
Our Laggan-Tormore project, where the two fields lay at a water depth of 600m, is the first development of this type in the extremely harsh operating environment West of Shetland. The subsea infrastructure will include eight subsea wells and two subsea production systems—one for Laggan and the other for Tormore—and the production systems will comprise two six-slot production manifold templates. The field(s) are being developed as a 143km long subsea tie-back (the second longest in the world) to a new gas processing terminal, the Shetland Gas Plant, that is currently under construction at Sullom Voe on Shetland. Two 18-inch flowlines will transport the gas from the subsea production system to the gas plant.
And a final example of our technological expertise is our cutting edge Geoscience Research Centre (GRC), based in Aberdeen. The GRC undertakes wide-ranging research in geology, geophysics and reservoir engineering, but focuses in particular on methods for integrated reservoir characterisation. The research is coordinated with the Total Group’s main technical centre in Pau, France and the work includes close collaborative partnerships with a number of world leading universities.
We often hear that it is important for new ideas to come from the field. How important is that to you and how close to the field are you?
I believe I am still very close to the field and, as an ex-driller myself, the first thing I do each morning is to look at our drilling and production reports. And that’s why I personally am so excited that, by the end of this year, Total will have eight drilling rigs on the UKCS—the largest number for a single operator on the UKCS.
In addition, I try to visit our offshore facilities and speak to our crews at least once every month.
Before arriving in the UK, you spent decades working in senior positions for Total in China, Indonesia, Venezuela and Qatar. How has your learning curve in the UK been compared to the other countries?
Before arriving in Aberdeen, I spent more than four years as managing director of Total E&P Qatar, a booming place where the sky seems to be the limit. Aberdeen on the other hand is a different story. The UKCS is undoubtedly one of the most mature offshore basins in the world and, therefore, faces unique challenges. As an industry here, our principal objective is to extend the production of natural resources off the coast of the UK—and Total’s objective in the UK is essentially the same.
This posting, however, is not my first experience in Aberdeen as I worked here for Total as a drilling manager 25 years ago. At that time, the company was developing a single hub, the Alwyn area, and beginning development at the Dunbar platform, which is 22km south of the Alwyn North platform. However, after Total’s takeover of Petrofina and the acquisition of Elf Aquitaine, the company also inherited the Central Graben area of the North Sea, home to the Elgin-Franklin fields. This was a £1.7 billion (USD 2.83 billion) development and the largest to have been completed on the UK Continental Shelf in over 20 years.
That being said, it has been exciting to come back to Aberdeen and I was pleased to see that the people here are as competent and professional as ever, and that the city’s position as the oil capital of Europe remains unchallenged.