Spanish oil major Repsol has reportedly asked for a permission from the authorities to plug eight wells and shut down the Varg field, located in the Norwegian sector of the North Sea.
Repsol is the operator of the field with 65% interest and the partners are Petoro with 30%, and Det norske oljeselskap with 5% interest.
The field is developed at a depth of 84 meters with a wellhead platform, Varg A, and a production ship, Teekay’s Petrojarl Varg FPSO, with integrated oil storage. These are linked together with a 1200-metre production and injection pipeline and a control umbilical. The oil is exported via shuttle tankers. The production started in December 1998.
According to Teekay’s spokesperson, as Repsol has given Teekay notice of termination of the Varg contract with effect from August 1, 2015, Petrojarl Varg is now scheduled to leave the field by August 1, 2016.
“At the moment it looks like the vessel will go into layup pending redeployment on another field,” the spokesperson added.
As for the reason for shutting down the field, the news website said that the field was no longer considered profitable.
The contract with Teekay for the FPSO Petrojarl Varg was cancelled back in November 2015. To remind, only several months earlier, in August 2015, Teekay and Talisman, now owned by Repsol, inked a three-year contract extension for the Varg FPSO, that was supposed to last until June 30, 2019.
Regarding further employment options for the FPSO Varg, the spokesperson for Teekay said: “Although Teekay continues to work actively on a number of options for redeployment of the Varg FPSO both inside and outside of Norway, it has become necessary to look at our offshore manning levels.
“Consequently, a number of our colleagues working offshore on our North Sea installations will have to leave us. It is always sad to see good colleagues go, but unfortunately we have to adapt our crewing levels to these new circumstances.”
“The crews have been informed and we are evaluating next steps. Teekay is working closely with employee representatives and the relevant trade unions in this process,” the spokesperson added.
Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons.
In an e-mail to Offshore Energy Today, Repsol confirmed that the FPSO contract was terminated.
Repsol’s spokesperson added: “Reserves produced exceed three times the approved PDO reserves. However, the field is currently uneconomical, and will move into decommissioning. The planned sail away date for the FPSO is August 1st 2016.”