NEWS that production from the giant Kraken field East of Shetland has been meeting the ambitious expectations of the firm that led on its development, EnQuest, will boost hopes there is lots to go for in the area.
Kraken is the kind of heavy oil field that used to be considered uneconomic.
EnQuest is producing from Kraken at cost rates that will allow it to make plenty of money on the output, even with Brent crude selling for around $65 per barrel, against $100/bbl plus when the project was approved.
Kraken came onstream on schedule and is on track to cost $2.3bn against an approved budget of $3bn.
The success may prompt others to look again at undeveloped heavy oil finds off Scotland and to hunt for more such fields. The waters off Shetland remain relatively under-explored.
But excitement may be tempered by the awareness the big fall in the cost of services in the North Sea has been at least partly due to sharp cuts in spending on new developments amid the oil price plunge since 2014.
Services firms have cut prices to help them win as much work as possible at a time of shrinking workloads. It will take lots of new projects to help fill the resulting shortfall.
EnQuest has also provided a reminder of how hard it can be to develop North Sea fields.
Output from the Alma/Galia asset, which it brought onstream in 2015 through the redevelopment of the Argyll field, fell last year amid challenges on several fronts.
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