TIDMORCA
RNS Number : 7251U
Orcadian Energy PLC
06 December 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
6 December 2021
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
OGA Electrification Competition
Orcadian Energy (AIM: ORCA), the North Sea focused oil and gas
development company, is delighted to announce that following a
competitive process it has been selected by the Oil and Gas
Authority ("OGA") to evaluate an approach to the electrification of
North Sea oil and gas platforms which will dramatically cut carbon
emissions.
Highlights:
-- Orcadian has been awarded GBP466,667 by the OGA to evaluate a
new concept for the electrification of key producing oil and gas
fields initially focussing on Central Graben area fields owned and
operated by others
-- Orcadian will also produce an Industry White Paper which
describes this approach to electrification of offshore oil and gas
platforms
-- Orcadian's concept would use renewable energy, generated from
local wind farms, for the bulk of the electricity required; with
back-up power generated from gas or net zero fuels, supported by
batteries for a fast response
-- Orcadian is working with Crondall Energy, Enertechnos,
Petrofac, North Sea Midstream Partners ("NSMP") and Wärtsilä;
together the working group will undertake an evaluation of this
concept and deliver a report to the OGA and Central Graben
Operators by the end of March 2022
-- The evaluation will include a commercial proposal for the
delivery of electrical power to Central Graben and Central North
Sea Operators interested in rapidly implementing electrification of
their platforms
OGA Competition
The OGA launched a GBP1 million decarbonisation competition to
explore the electrification of offshore oil and gas installations
on 23 September 2021. The OGA was looking for studies (technical,
engineering, and/or commercial) that would bring electrification
projects a step closer to reality. On behalf of the working group,
Orcadian submitted an entry to the competition, and has undertaken
to evaluate this concept and deliver a report, and an Industry
White Paper, to the OGA and the Central Graben operators by the end
of March 2022.
Orcadian Electrification Concept
Orcadian has been an active participant in the Central North Sea
Accelerated Energy Transition Plan (CNS AETP) working group and has
selected a floating wind turbine as a key means of reducing
emissions from the Pilot field development. Operators in the CNS
AETP have largely focussed on power-from-shore as a means of
electrifying the CNS.
Orcadian's proposal is to utilise renewable energy, generated in
local wind farms, for the bulk of the electricity required on the
fields; with back-up power generated efficiently from gas or net
zero fuels, supported by batteries for a fast response. It is,
taken together, one of the most effective and practical ways to
lower emissions in the oil and gas production process.
This approach would dispense with the requirement for a cable to
shore, be significantly less costly, and the project could be
implemented on a faster timescale, with simpler brownfield
modifications on the existing platforms and less disruption to
supply from these critical assets, which supply about a quarter of
UK gas production. In addition, the Directors believe the UK's
energy supplies would be much more secure using this approach when
compared with relying on a single high voltage direct current
(HVDC) cable from shore to support production of oil and gas from
the area.
Orcadian submitted this proposal on 25 October 2021 and was one
of three winners. Orcadian will utilise the funds from this
competition to engage the working group to prepare and deliver this
report on an accelerated timescale.
Commercial Opportunity
The Directors believe that this opportunity presents an
additional commercial benefit to the Company and its investors.
Orcadian plans, with support from North Sea Midstream Partners
(NSMP), Petrofac as EPC (Engineering, Procurement and Construction)
and O&M (Operations & Maintenance) contractor, and Wärtsilä
as a potential key supplier, alongside Crondall and Enertechnos, to
develop a commercial proposal for the delivery of electrical power
to Central Graben and any North Sea Operators interested in rapidly
implementing electrification of their platforms.
Carlo Procaccini, OGA Head of Technology, said:
"Decarbonisation of oil and gas operations is an industry
imperative over the next decade, and platform electrification from
renewable sources will be an effective way to achieve that. We were
delighted with the strong industry interest in the GBP1m BEIS / OGA
electrification competition and the quality of the winners'
submissions. Orcadian Energy's study, alongside the two other
selected projects, will assess innovative solutions to kickstart
O&G electrification on the UKCS"
Steve Brown, Orcadian's CEO, said:
"We are delighted with this news, which is a vote of confidence
in the sustainable production methods Orcadian has helped to
identify. From our perspective, minimising the cost of Net Zero is
of paramount importance, the lower we make the cost of abatement,
the more we can afford to do. Industry and Government have both
committed to electrification of North Sea platforms - which will be
vital in the energy transition. We intend that our contribution be
to radically reduce the cost of implementing electrification.
"We had worked very closely with our consulting engineers,
Crondall Energy, to minimise emissions on Pilot, and together we
had learned a lot about how best to integrate renewable energy
generation with oil and gas production facilities. In terms of
emissions reduction, maximising renewable energy usage compared
very well with the alternative of "onshoring" the responsibility
for decarbonisation to the national grid, and, in the case of Pilot
at least, was much less costly.
"We have identified a new, but well advanced, enabling
technology which minimises power losses associated with
transmitting medium voltage alternating current over miles of
cable. We understand the cable designer, Enertechnos, is planning
to install a 28km cable in Wales in 2022, to prove the concept in a
real-world setting.
"As part of the evaluation of this alternative concept, we
intend to select the very best renewable energy system to provide
the bulk of the power to the platforms; we have already entered
into discussions with both Floating Power Plant A/S and Wind
Catching Systems AS, and we intend to listen to what every
potential wind technology provider has to offer.
"Backing up the system with highly efficient gas reciprocating
engines is a practical and proven method to provide a reliable
power supply and enables implementation of the project on an
accelerated time scale.
"Since we conceived this approach in early October 2021, we have
been delighted with the enthusiastic response of all of the
companies with whom we have shared our conceptual solution. We are
excited to work with North Sea Midstream Partners, Petrofac and
Wärtsilä to develop a commercial offering to CNS Operators which we
believe will be truly compelling."
Orcadian has published a short presentation which explains more
about our concept, please follow this link to watch the video:
https://bit.ly/OGA_Electrification
For further information on the Company please visit the
Company's website: https://orcadian.energy
Contact:
Orcadian Energy plc + 44 20 7920 3150
Steve Brown, CEO
Alan Hume, CFO
-------------------------
WH Ireland (Nomad and Joint Broker) +44 20 7220 1666
-------------------------
Harry Ansell / Fraser Marshall (Corporate
Broking)
Katy Mitchell / Andrew de Andrade (Nomad)
-------------------------
Shore Capital (Joint Broker) +44 20 7408 4090
-------------------------
Toby Gibbs / James O'Neill (Advisory)
-------------------------
Tavistock (PR) + 44 20 7920 3150
-------------------------
Nick Elwes / Simon Hudson / Matthew orcadian@tavistock.co.uk
Taylor
-------------------------
Charlesbye (PR) + 44 7403 050525
-------------------------
Lee Cain / Lucia Hodgson
-------------------------
About Orcadian Energy
Orcadian is a North Sea oil and gas operator with a difference.
In planning its Pilot development, Orcadian has selected wind power
to transform oil production into a cleaner and greener process. The
Pilot project is moving towards approval and will be amongst the
lowest carbon emitting oil production facilities in the world,
despite being a viscous crude. Orcadian may be a small operator,
but it is also nimble, and it has grasped opportunities that have
eluded some of the much bigger companies. As we strike a balance
between Net Zero and a sustainable energy supply, Orcadian intends
to play its part to minimise the cost of Net Zero and deliver
reliable organic energy.
Orcadian Energy (CNS) Ltd ("CNS"), Orcadian's operating
subsidiary, was founded in 2014 and is the sole licensee of P2244,
which contains 78.8 MMbbl of 2P Reserves in the Pilot discovery,
and of P2320 and P2482, which contain a further 77.8 MMbbl of 2C
Contingent Resources in the Elke, Narwhal and Blakeney discoveries
(as audited by Sproule, see the CPR in the Company's Admission
Document for more details). Within these licences there are also
191 MMbbl of unrisked Prospective Resources. These licences are in
blocks 21/27, 21/28, 28/2 and 28/3, and lie 150 kms due East of
Aberdeen. The Company also has a 50% working interest in P2516,
which contains the Fynn discoveries. P2516 is administered by the
Parkmead Group and covers blocks 14/20g and 15/16g, which lie
midway between the Piper and Claymore fields, 180 kms due East of
Wick.
Pilot, which is the largest oilfield in Orcadian's portfolio was
discovered by Fina in 1989 and has been well appraised. In total
five wells and two sidetracks were drilled on Pilot, including a
relatively short horizontal well which produced over 1,800 bbls/day
on test. Orcadian's proposed development plan for Pilot is based
upon a Floating Production Storage and Offloading vessel, with over
thirty wells to be drilled by a Jack-up rig through a pair of well
head platforms and will include a floating wind turbine to provide
much of the energy used in the production process. Emissions per
barrel produced are expected to be about an eighth of the 2020
North Sea average and to lie in the lowest 5% of global oil
production.
About Crondall Energy
Crondall Energy Ltd is a leading independent consultancy
providing strategic, commercial and technical services for offshore
energy projects. Crondall works with a range of project
stakeholders, including energy companies, investors and law firms;
and helps their clients to manage technical, commercial and
strategic risks and achieve positive project outcomes. Crondall are
passionate about the role of the offshore industry in providing
society's sustainable energy and are actively engaged in supporting
their clients to confront the challenges of generating low carbon
energy and renewable energy in the offshore environment.
About Enertechnos
Enertechnos Limited is an electrical engineering business,
founded in 2014, that is focused on improving the efficiency of
cables used in any kind of electrical distribution grid.
Enertechnos's Capacitive Transfer System (CTS) allows cable
manufacturers to manufacture more efficient cable for Transmission
& Distribution grids at a similar cost to incumbent cables on
the market and using their existing manufacturing equipment. CTS
uses a unique and patented topology to balance the reactance
inherent in distribution cable with capacitance, thus substantially
reducing losses and allowing transmission of greater amounts of
energy with lesser amounts of conductor than with conventional
cable. Enertechnos works with the incumbent cable manufacturers to
improve their offering and markets alongside them to the end buyers
(e.g. Distribution Network Operators who install, maintain and
upgrade grids, as well as Renewable Energy, Offshore Oil & Gas,
Mining, and Electric Vehicle companies).
About Petrofac
Petrofac is a leading international service provider to the
energy industry, with a diverse client portfolio including many of
the world's leading energy companies.
Petrofac designs, builds, manages, and maintains energy
infrastructure. Our purpose is to enable our clients to meet the
world's evolving energy needs.
Petrofac's core markets are in the UK North Sea, the Middle East
and North Africa (MENA) region where we have built a long and
successful track record of safe, reliable, and innovative
execution, underpinned by a cost effective and local delivery model
with a strong focus on in-country value. We operate in several
other significant markets, including India, Southeast Asia, and the
United States. We have 9,400 employees based across 31 offices
globally. Petrofac is quoted on the London Stock Exchange (symbol:
PFC).
For additional information, please refer to the Petrofac website
at www.petrofac.com
About NSMP
NSMP is a leading independent midstream business with
large-scale gas infrastructure assets serving the North Sea. NSMP
transports and processes natural gas from customers across the West
of Shetlands, Northern North Sea, Norwegian North Sea, Central
North Sea and Southern Gas Basin. NSMP provides essential services
to over 35 fields owned by energy majors, utilities and independent
producers, through a combined gas pipeline length of nearly 600km
making NSMP's infrastructure the largest and most diversified gas
transportation and processing system in the UK. NSMP also owns and
operates a small-scale Bio/LNG plant in Norway. NSMP is committed
to using its assets to make a positive difference to both security
of supply and the energy transition.
Learn more about NSMP's commitment and involvement in relation
to ESG and Energy Transition at:
https://nsmp-limited.com For more information on NSMP please contact: Laura Jarvie: Laura.Jarvie@nsmp-limited.com
About Wärtsilä
Wärtsilä is a global leader in innovative technologies and
lifecycle solutions for the marine, oil & gas and energy
markets. We emphasise innovation in sustainable technology and
services to help our customers continuously improve their
environmental and economic performance. Our team of 17,500
professionals in 200 locations in more than 70 countries shape the
decarbonisation transformation of our industries across the
globe.
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