The break-even oil price for the Bentley project’s lifetime has been brought down to $35 per barrel.

Xcite cuts costs at Bentley oilfield

LONDON, August 24, 2015 – Heavy oil appraisal and development company Xcite Energy is slashing costs at its stalled Bentley offshore oilfield development in the UK North Sea, as contractor rates are cut in the face of low oil prices.

The operator is seeking to take advantage of lower costs in the hydrocarbons supply chain and is pursuing funds for a floating production, storage and offloading vessel to be used at the 300-million-barrel field, with the Bentley project now commercially viable at an oil price of $35 per barrel.

It has already approached rig owner TS Offshore for its KFELS N Plus-design newbuild jack-up on a lease contract. The rig is currently being built at the Keppel Fels yard in Singapore. Meanwhile, a memorandum of understanding was signed with China National Offshore Oil Corporation majority-owned subsidiary China Oilfield Services in late 2014 to supply a jack-up rig for the asset, with drilling to commence in 2017.

“The current industry environment has freed up capacity in shipyards and we are actively pursuing and evaluating potential opportunities as a result of increasing competitiveness for major projects in order to deliver the best value and most secure project execution strategy,” Xcite Energy said in a statement.

The field was originally expected to come on line in mid-2018, but depressed oil prices had compromised project economics. Accordingly, the submission of a development plan is on hold.

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