Chevron in Europe is going ahead with Front End Engineering and Design studies for its Rosebank discovery in the UK West of Shetlands region.

Estimated to contain up to 240 million barrels of oil equivalent, Chevron says it is going to proceed with the project using an floating-production based development solution

Almost exactly three years ago – on 7 August 2009 – Chevron awarded Norway’s Sevan Marine a study contract for potential application of its Sevan floating platform for the Rosebank project and the purpose was to demonstrate if a Sevan floating platform could meet the conditions at the Rosebank field location.

That study, which was comprehensives in scope, covered hull sizing and configuration, plus topsides engineering, mooring, motion and stability analyst, marine operations, risk identification,  as well as cost and schedule estimates.

During the same year Chevron had also awarded a separate facilities engineering contract for the project to Intectsea, based in Houston.

With this latest announcement Chevron appears to have fulfilled its commitment to reach concept selection stage for the Rosebank development mid-year: Today the company said it was entering the FEED stage for its Rosebank oil and gas project in the West of Shetlands.

Brenda Dulaney, managing director of Chevron Upstream Europe declared: “Rosebank is an important project for Chevron in Europe, and the first Chevron-operated deepwater field to move into FEED in the West of Shetland region, which holds a significant portion of the U.K.’s undeveloped oil and gas resources.”

Dulaney also acknowledged that changes in the UK offshore tax regime announced in the Budget in   March had also had an impact on the development. She said: “The efforts by the U.K. government, to stimulate development in this important region, have enabled the progression of this project and underline the importance of industry and government collaboration. A successful Rosebank development will deliver positive contributions to the U.K. economy through employment, production, tax revenue and enhanced energy security for the country,” Dulaney added.

In the UK Budget in March, the Government introduced a new Field Allowances  for fields with more than 187m boe of resevers and in more than 1,000 metres of water depth – both criteria met by Rosebank. This allowance has a cash value of £960m  according to Oil and Gas UK.

Chevron first disclosed a discovery on the Rosebank and Lochnagar prospects back in December 2004. Chevron said then that it had made a significant oil and gas discovery with the 213/27-1Z well in the Faroe-Shetland Channel.

The find lies 130 kilometres (80 miles) north-west from the Shetland Islands, in water depths of approximately 1,100 metres (3,700 feet) and Chevron now says the project will involve an FPSO, production and water injection wells, subsea facilities and a gas export pipeline.

In July 2007, Chevron said it had successfully appraised the find  with the conclusion of a  production test on a Rosebank appraisal well 205/1-1. At that time, Chevron said during the production test, the well flowed at choked rates of 6,000 b/d of good quality 37° API light oil. The 205/1-1 well was the second appraisal well on Rosebank as part of a three-well programme carried out by the Transocean Rather.  This was a deviated well drilled at the southern end of the Rosebank structure, and it encountered over 24 metres (80 ft) of vertical oil pay in sands at a depth of approximately 2,743 m (9,000 ft) Total Vertical Depth Subsea.

So far the only indication from Chevron about the size of the find is that it could contain a potential 240 million barrels of oil equivalent. That figure may have changed after ocean bottom node surveys were conducted over the field area during 2010 and 2011, which were carried out by Seabird Exploration.

In February this year the Stena Carron drillship completed the 213/28-1 well on the Aberlour prospect, in a water depth of 1,075 metres, near Rosebank, without saying anything about the outcome.

Chevron has managed to win verbal government backing for the Rosebank development with Energy Minister welcoming the announcement of the FEED stage of the project by stating: “This multi-billion pound project from Chevron is opening up a new frontier for UK oil and gas exploration. Rosebank is a pioneer development that could unlock up to a fifth of the UK’s remaining oil reserves.

And Chloe Smith, Economic Secretary to the Treasury, added her voice of support to Chevron’s statement, saying: “I also welcome Chevron’s recognition of the UK Government’s efforts to create the conditions for new investment. The Treasury has demonstrated its commitment with an ambitious Budget package of measures on decommissioning relief certainty and field allowances, which we believe will generate billions in new investment.”