Australian independent Santos has resumed production of its heavy sweet Van Gogh crude after almost a year.
Production restarted from the Ningaloo Vision floating production, storage and offloading (FPSO) vessel following scheduled maintenance in Singapore, Santos said on 26 March. Output is expected to reach 10,000 b/d in the coming weeks, it said.
The Ningaloo Vision ties in the Van Gogh, Coniston and Novara oil fields offshore western Australia. The FPSO arrived in Singapore early last year for scheduled maintenance during April-August 2020. The FPSO had since remained in Singapore as Covid-19 travel restrictions made it difficult to move personnel to Singapore to bring the FPSO back to Australia, according to traders.
"I am pleased to report that the Ningaloo Vision is back on location and producing again, following a challenging dry dock campaign last year when it arrived in Singapore just as the nation was going into three months of lockdown and the maintenance workforce being among the hardest hit by a second wave of the coronavirus pandemic," Santos managing director and CEO Kevin Gallagher said. "The Ningaloo Vision's return to production after a successful maintenance programme sets the facility up for the next stage of new production from the Van Gogh oil field."
Santos offered a cargo of Van Gogh crude in the spot market this month for loading in May, traders said. A lack of Van Gogh availability over the past year lifted demand for other Australian heavy sweet grades like Vincent and Pyrenees, which are suitable for fuel oil blending.
The production resumption comes as the company prepares for a second phase of infill drilling at the Van Gogh field due to begin in the second quarter of this year, Gallagher said.
"Van Gogh infill phase two is targeting around 10mn bl gross reserves, with first oil scheduled in the fourth quarter [of] this year," he said. "Preparations for the three-well campaign, using the Valaris MS1 mobile offshore drilling unit, are tracking well, with drilling expected to start within weeks."
Santos in March 2020 made a final investment decision on phase two of the Van Gogh field, which is planning first oil from the expansion in late 2021.
Van Gogh started production in 2010 and was expanded through the tie-backs of the nearby Coniston and Novara fields to the FPSO in 2015 and 2016, respectively. Santos has a 52.5pc interest in the Van Gogh-Coniston-Novara project, which it operates. The remaining interest is owned by Japanese upstream group Inpex.
