Foinaven investment good news for Flotta

Orkney’s Flotta oil terminal was given what could potentially be a major boost this week by news that BP were investing more than £200 million into the Foinaven field.

The project was one of four announced by the Department of Trade and Industry on Monday which will see more than £1 billion invested into North Sea oil and gas ventures, securing 2,500 jobs.

BP and their partners say they will invest £210 million into Foinaven to access an extra 85 million barrels of oil. Oil from the field is currently taken to Flotta by shuttle tankers. The new drilling work at Foinaven is due to start next year and is expected to last for two years, sustaining 500 offshore jobs.

Speaking this week, Flotta terminal manager Mr Trevor Newton said the investment was good news for Orkney.

“It does have a potential impact on the levels of activity here. We have got a contract with the Foinaven field operators for the shuttle tanker service which runs for ten years. So it does not change that part of it immediately but it certainly is good news because it will support continuing high levels of production from the field. It is certainly good news for Flotta and for Orkney.”

Because Flotta is tied into the contract, which expires in seven years, Mr Newton said he couldn’t speculate on whether BP’s investment would extend the lifespan of the terminal.

“There is no way I can speculate how it may impact on the long-term relationship between ourselves and the Foinaven field operators except that we have provided them and will continue to provide them with the best possible service we can give them,” he said. “We look upon it as a sound investment for the future.”

The three other projects announced this week were the creation of a £320 million gas pipeline from the West Shetland field to the Magnus oil field; a £340 million development of the Leadon oilfield to the north-east of Aberdeen, and a £75 million development by Ranger Oil of their Kyle oilfield in the central North Sea.

The news followed reports that Sullom Voe had been chosen by BP to take oil from their Clair field to the west of Shetland.

Flotta also put in a bid for the lucrative contract, but a spokesman from BP told The Orcadian that no decision had been taken.

“The situation has not changed,” he said. “We are continuing to finalise a preferred export route.”

With the Clair field practically on Sullom Voe’s doorstep, it is unlikely that the oil will come to Flotta though.

A decision to pipe oil from the Atlantic field to Sullom Voe was announced by BP two years ago, but the deal fell through – oil prices fell to an all time low and the project was shelved. It was rejuvenated this year.

Mr Newton said that as far as he knew, BP had not reached a final decision.

“We are, like everybody else, waiting for BP to make a formal announcement,” he said.

myles.hodnett@orcadian.co.uk