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Total to proceed with the Edradour gas field

TOTAL has given the go- ahead to the £340m development of the Edradour gas field west of Shetland after all and bought into the Glenlivet discovery nearby in the latest sign of its enthusiasm for the area.

The French oil and gas giant said it had decided to proceed with Edradour after squeezing concessions out of contractors to improve returns on its investment.

The decision forms part of Total's plan to establish a major presence in the West of Shetland area, where it expects to start production from the £2.5bn Laggan-Tormore development off the islands this year.

The company has installed costly production facilities such as pipelines for Laggan-Tormore that other fields could use.

Patrice de Vivies, head of Total's Northern European exploration and production arm, said: "With the upcoming start-up of Laggan-Tormore, the sanction of Edradour and the entry into Glenlivet, Total is establishing a new strategic hub in the West of Shetland area."

The planned investment in Edradour provides another big vote of confidence for the relatively under-explored West of Shetland area.

Majors including BP and Shell are investing heavily in big developments off Shetland, where there is relatively limited production infrastructure in place.

However, the surge in activity put pressure on costs in the area, raising questions about the viability of some projects.

Mr de Vivies said Total put Edadour on hold in 2013 due to significant cost increases following the tendering process. He added: "Subsequent negotiations with the contractors have reduced the costs to an acceptable level, allowing us to successfully launch the project."

In November Chevron shelved plans for the £6bn Rosebank development West of Shetland saying it was not currently economically attractive.

Total discovered Edradour, 47 miles north west of Shetland, in January 2011. It will be tied into the Laggan and Tormore fields around 20 miles away.

Total expects to bring Eadradour onstream in the fourth quarter of 2017 and production to plateau at 17,000 barrels of oil equivalent per day. It has a 75% stake in Edradour. Denmanrk's DONG has 25%.

Total acquired a 60% interest in Glenlivet from DONG, on undisclosed terms. DONG retains 20%.

Aberdeen-based Faroe Petroleum and First Oil Expro have 10% each.

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