British energy giant
) and its partners have handed over contracts in excess of £1
billion to dozens of UK-based companies for a major
re-development of the Schiehallion and Loyal oil fields to the
west of Shetland.
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The firms will be liable to supply services and equipment to
redevelop the two oil fields. Since production commenced in 1998,
the Schiehallion and Loyal fields have generated about 400
million barrels of oil and another 450 million barrels of
resource can still be obtained from the sites on the North
In July 2011, BP and its partners announced their plan to make
investments of £3 billion to redevelop both fields in a project
known as Quad 204. The funds were be used to set up new
facilities that would extend production over the next two decades
The revamping of the BP-operated fields, entails two important
elements. The first is the replacement of the existing
Schiehallion floating, production, storage and offloading vessel
with a new one, which is planned for 2015. The new 270-meter long
vessel will be able to process and export about 130,000 barrels
of oil per day and store over a million barrels.
The second is the major upgrade of the subsea infrastructure. The
yield from the new facilities is scheduled to start in 2016.
Among the contracts awarded, the latest includes the one given to
OneSubsea for the manufacture of 11 subsea trees in Leeds. This
contract is valued at £65 million. It follows awards presented
since 2012 to companies based in Aberdeen, Bristol, Fife,
Leicester, Newcastle, Shetland, Wirral and other U.K. locations,
taking the total value of the contracts to over £1 billion.
The partners in the Quad 204 project are BP,
Royal Dutch Shell plc
), OMV and
) holding 36.3%, 54.03%, 4.84% and 4.84%, respectively.
BP carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1
(Strong Buy) stock
Range Resources Corp.
) appears attractive for the short term.