October 1, 2012

North Sea Oil Field Summary Report The Armada Complex

NWAFOR OBINNA INSTITUTE OF PETROLEUM ENGINEERING, HERIOT WATT UNIVERSITY | EDINBURGH

MSc. Petroleum Engineering Course Requirement

Key Facts

ARMADA COMPLEX

Fields Drake Field Fleming Field Hawkins Field

Operator BG Group BG Group BG Group

Offshore / Onshore OFFSHORE OFFSHORE OFFSHORE

UK Quadrant / Block UK022/05 UK022/05 UK022/05

Field Type Gas-Condensate

Gas-Condensate Gas-Condensate

Discovery Date 1982/09 1982/09 1980/10

Discovery Well 22/05b- 2 22/05b- 2 22/05a- 1A

Field Status PROD SUSPENDED

PRODUCING PRODUCING

Production Start Sep-1997 Sep-1997 Sep-1997

Initial Gas Reserve (bcf) 316 1026 21

Gas Reserve at 01/01/2011 (bcf) 29 156 0

Initial Condensate Reserve (mmbbl)

21 47 3

Condensate Reserve at 01/01/2011(mmbbl)

1 3 0

Water Depth 289ft 289ft 295

Ownership

BG Group 76.42% 76.42% 76.42%

Centrica 23.58% 23.58% 23.58%

Fig.5 Sourced from:DECC (2012), Wood-Mackenzie (2012)

Contents Key Facts .................................................................................................................................................. 1

1 Introduction: Location and Ownership ........................................................................................... 3

2 Exploration and Appraisal ............................................................................................................... 5

2.1 Geology ................................................................................................................................... 5

2.2 Exploration and Appraisal ....................................................................................................... 5

3 Development ................................................................................................................................... 7

4 Production History .......................................................................................................................... 8

5 Conclusion ..................................................................................................................................... 10

References ............................................................................................................................................. 10

THE AMARDA COMPLEX 1 Introduction: Location and Ownership The Armada refers to several oil fields located in the Central North Sea region, within the UK Sectors.

This is about 250 km East of Aberdeen, around latitude 58oN and Longitude 1.9oE. This area is also

called the Greater Armada Region.

Specifically, the Armada field are three gas condensate fields namely, Hawkins discovered in 1980,

Drake discovered in 1982, and Fleming which was discovered in 1987 (Wood-Mackenzie, 2012). They

are named after the British Sailors who fought the Spanish Armada of 1588, together they are called

“the Armada complex.” These fields are in blocks 16/29A, 16/29C, 22/5A and 22/4a (DT). The blocks

were awarded as shown in table 1 below.

Armada Complex Blocks

Block Operator Award Year

22/5a BP Amoco 1965

16/29a Philips 1970

22/4a Philips 1980

22/5b BG 1980

16/29c Philips 1987

Table 1: Adapted from Stuart (2003:129)

Fig.1 Source: Wood-Mackenzie (2012)

Fig.2 Source: BG-Group (2012)

Three other fields Seymour, Maria and Rev have been developed from the Armada Platform (located

on block 22/5b, see Fig.2). While they are part of “the Greater Armada Area”, only Hawkins, Drake and

Fleming are referred to as the “Armada Complex” or Armada Field.

The Armada Complex was created when a decision 1994 by the owners to unitize them for the purpose

of joint and simultaneous development (Stuart, 2003:129). Subsequently, BG Group has the largest

share of the unitized field and is also the operator. The owners at the time of unitization are as listed

in table 2 below.

Unitization Partners for Armada Complex

Partners (%) Armada

BG (operator) 45.27

Amoco (UK) Exploration Company 18.20

Fina Exploration Limited 12.53

Phillips Petroleum Company United Kingdom

Limited

11.45

Yorkshire Electricity Ltd 6.97

Agip 5.58

Table 2: Sourced from BG Group (1997)

Several acquisitions, exchanges and transfers have been done over the years, especially by BG group.

Currently, the Armada Complex is operated by BG Group (76.42%), with partners Centrica (23.58%).

2 Exploration and Appraisal

2.1 Geology The Armada complex lies at the intersection of three grabens, the South Viking, the Witch Ground and

the East Central grabens (Wood-Mackenzie, 2012). The triple junction later formed the Fish basin,

which was a major depositional centre during the early cretaceous period (Stuart, 2003:141). It is

believed that this depositional centre was the source area for the Armada hydrocarbons.

The Hawking and the Drake are sandstone reservoirs of Jurassic age, they are of the Fulmar formation

(Stuart, 2003:141). The Hawking lies at a depth of 3050m below sea level, while the Drake lies at

3350m from same reference. The two fields are capped by mud stones of Heather/Kimmeridge Clay

formation (Wood-Mackenzie, 2012).

The Fleming reservoir occurs at a depth of 2745m below sea level (Wood-Mackenzie, 2012). It is also

a sandstone reservoirs, but belongs to the younger Palaeocene period. The reservoir rock is of

Maureen formation, while it is capped by mudstones of Lista formation (Stuart, 2003:142).

2.2 Exploration and Appraisal Prior to the unitization of the fields in 1994, the various operators carried out exploration activities. In

1980, Amoco drilled well 22/5a-1 and tested gas in the area now identified as the Hawkins field (Wood-

Mackenzie, 2012). The well encountered hydrocarbon in an upper Jurassic sandstone, and a thin

Palaeocene sandstone. The later was not tested. Superior Oil drilled well 22/5b-2 in 1982, and

encountered two hydrocarbon reservoirs, the first was the Drake, while the second was named

Howard. Howard belonged to the Palaeocene (Wood-Mackenzie, 2012). Another well drilled by Philips

between 1986 and 1987 discovered the Maggie fields, a Palaeocene sandstone reservoir. (Wood-

Mackenzie, 2012).

The first attempt at appraisal on the Armada was on the Drake filed. In 1983, Superior Oil drilled the

appraisal well 22/5b-4 and tested the two gas zones they encountered. Three other appraisal wells

(22/5b-7, 22/5b-8, 22/5b-9) drilled in 1984 were dry holes. (Wood-Mackenzie, 2012). Amoco drilled

another unsuccessful Drake appraisal well in 1988.

Philips drilled appraisal wells 16/29C-7 in 1988 and tested the Drake and Howard fields. Wells 16/29A-

9 and 16/29C-10 drilled by Philips between 1988 and 1989 tested the Maggie filed. They helped in the

delineation of the fields (Wood-Mackenzie, 2012). The rich geological information that came from the

various exploration wells in the late 1980s indicated that Howard and Maggie fields were the same

continuous accumulations (Stuart, 2003:140). A 3D seismic survey was completed in the area in 1992,

and led to the renaming of the Howard and Maggie fields as Fleming field in the same year.

The Drake appraisal (well 22/5b-4) indicated 35.1 mmcfd of gas and 1,840 b/d of 46° API condensate.

The Fleming appraisal (Maggie field in well 16/29A-9) indicated 30 mmcfd of gas and 1,500 b/d of 48°

API condensate.

The Initial reserve estimates are as below in table 3:

Reserve Estimates for Armada Complex

Table3: Sourced from Wood-Mackenzie (2012)

Reserve Drake Fleming Hawkins

Initial Gas Reserve (bcf) 316 1026 21

Gas Reserve at 01/01/2011 (bcf) 29 156 0

Initial Condensate Reserve (mmbbl)

21 47 3

Condensate Reserve at 01/01/2011(mmbbl)

1 3 0

3 Development

The development of the armada complex was dictated by two commercially important events. The

first is the unitization of the field in 1994, which allowed for joint development. Equities were allocated

permanently to the owners and were not subject to redetermination (Stuart, 2003:129). BG Group

was appointed the operator following the unitization. The second event was the development of the

Central Area Transmission System (CATS), a gas pipeline on which the Armada subsequently relied on

to evacuate its productions to Teesside. Following these and rather unusual commercial negotiations

for the time, the joint venture approval for the development of Armada was achieved in 1994 (Stuart,

2003:129).

The Armada was developed with a steel platform located between the Drake and Hawkins fields. It

has processing facilities, utilities and accommodation modules. The platform was completed in 1997

and was designed to carter for 21 wells. (Wood-Mackenzie, 2012).

The Armada fields were develop with extended reach wells. The phase one of the development drilled

five wells for the Flemings, two for Drake and one for Hawkins. The Hawkins well was not successful

(Wood-Mackenzie, 2012). These wells were drilled using the semi-submersible Santa Fe 135. Tie-back

and completion were done using the Jack-up rig Santa Fe Magellan in 1997. (Stuart, 2003:140)

The second phase of the development involved the drilling of three wells between 2001 and 2002.

Well 22/5B-A9 was drilled for the Flemings. Well 22/5B-A10 was drilled for Hawkins, being

unsuccessful, it was then completed for the Flemings. The third well, 22/5B-A11 was the first successful

well for Hawkins. (Wood-Mackenzie, 2012).

The gas, and condensates from the Armada complex are transported through the CATS lines. While

the gas is transported all the way to Teesside, the natural gas liquids and condensates are diverted to

the Forties Pipeline System for onward transport to refinery. (Wood-Mackenzie, 2012). The export

compression system was reconfigured in 2005, to increase export capacity.

The first phase development of the Armada cost a total of 420 million pounds between 1994 and 1997.

Some 5 million pounds was spent on drilling in 1999. The second phase of the development from 1999

to 2002 cost 113 million pounds, while the export compression reconfiguration in 2005 cost 30 million

pounds (Wood-Mackenzie, 2012). Altogether, the development cost on Armada complex stands at

563 million pounds.

4 Production History

Production in the armada fields started in 1997, except for the Hawkins field which had two

unsuccessful wells. Hawkins started producing in 2002. Production from Drake and Fleming peaked in

1999 at 512 mmcf/d.

Fig.3 Adapted from DECC (2012)

0

1000

2000

3000

4000

5000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

ARMADA COMPLEX ANNUAL LIQUID PRODUCTION

'000 BBLS

Drake Fleming Hawkins

Fig 4 Adapted from DECC (2012)

The field were closed in 2005 during the re-configuration of the export compression system (Wood-

Mackenzie, 2012). The reduction in production from 2004 levels can be seen in figure 4 and 5 above.

Although Hawkins was successfully produced in 2002, the produced volumes have remained very small

relative to Drake and Fleming fields. The Hawkins reserves are almost depleted. The reserve estimates

for all the fields have been shown in table 3. The projected volumes shows that the armada complex

production would have thinned out by 2020. (Wood-Mackenzie, 2012). However, the life span of the

armada platform might extend beyond this period as new developments are tied to it for transport.

0

20000

40000

60000

80000

100000

120000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

ARMADA COMPLEX ANNUAL GAS PRODUCTION

MMSCF

Drake Fleming Hawkins

5 Conclusion

The Armada complex fields represent a span of about 35 years in the UK oil industry exploration and

production activities. They are unique in being among the first UK fields to be developed using a fixed-

equity unitization strategy (Stuart, 2003:129). The use of extended wells and a single platform helped

it achieve a development cost of less than 3$ per oil equivalent, this being one of the lowest in the UK

oil industry (Stuart, 2003:129).

References

BG-Group (1997) Press Release: Armada Production Begins. [Online] Available at: <http://www.bg-

group.com/MediaCentre/PressArchive/1997/Pages/pr-024.aspx> [Accessed 8 October, 2012].

BG-Group (2012) Armada Overview. [Online] Available at :< http://www.bg-

group.com/ukinfrastructure/UK-Operations/Pages/ArmadaOverview.aspx> [Accessed 8 October,

2012].

Centrica (2012) News: Centrica Acquires Portfolio of UK North Sea Assets. [Online] Available at:

<http://www.centrica.com/index.asp?pageid=1041&newsid=2370> [Accessed 8 October, 2012].

Department of Energy and Climate Change UK (2012), UKCS Field Information. [Online] Available at:

<https://www.og.decc.gov.uk/fields/fields_index.htm> [Accessed 8 October, 2012].

Stuart I.A. (2003). The Armada Development, UK Central North Sea: The Fleming, Drake and Hawkins

Gas-Condensate Fields. United Kingdom Oil and Gas Fields: Commemorative Millennium Volume, Issue

20. The London Geological Society.

Wood-Mackenzie (2012) The Greater Armada Area: Asset Analysis. [Online] Available through: Wood

Mackenzie Europe (UK) Upstream Services < http://www.woodmacresearch.com/cgi-

bin/wmprod/portal/energy/energyPortal.jsp> [Accessed 8 October, 2012).