The start-up of Buzzard phase 2 in the UK North Sea has been postponed because of lower oil prices and pipeline maintenance, offshore-focused Chinese energy firm CNOOC told Argus today.
CNOOC has delayed first oil from the field's second development phase to 2021. The project — which is planned to peak at 37,000 b/d of oil equivalent (boe/d) — was due to come on stream in the second half of this year.
The firm's realised oil price in the first half of this year averaged $38.72/bl, down by 40.1pc from a year earlier, while its realised gas price fell by 2.8pc to $6.29/mn ft³ over the same period. CNOOC scaled back its output and capital expenditure (capex) targets earlier this year, after oil prices collapsed in late March.
Buzzard is the UK's biggest oil field and the largest contributor to the Forties crude blend, which is one of the five grades that underpin the North Sea Dated benchmark. But production is slowing down. Forties Pipeline System (FPS) operator Ineos forecasts that Buzzard's crude output will average around 95,000 b/d this year, compared with around 121,000 b/d last year. Production peaked at 218,000 b/d in 2009 but the field continued producing almost 200,000 b/d until 2013.
Buzzard production shut down unexpectedly at the end of 2019, and the field suffered further unplanned outages in spring this year.
Ineos has pushed back a planned 21-day maintenance programme on the FPS from this year to May-June next year because of the need to abide by social distancing measures intended to curb the spread of the Covid-19 pandemic.
