A few things to note about the news that the White Rose extension field – called North Amethyst – pumped its first oil this week;
- It took only four years to go from discovery to production. reducing the time from discovery to production is huge for the future of the offshore industry.
- Tiebacks. Expect to see more of them as Terra Nova dries out, for example. Floating platforms are the most cost-effective way to exploit the numerous small fields that have already been discovered offshore. The gang at Terra Nova and eventually at White Rose can just float their hulls around, hook up to underwater pipes and pump the crude cheaply, efficiently and in a way that should be as environmentally sound as oil production can be.
- An established royalty regime is a key part of promoting development. That’s what worked for this deal and helped speed up development. Thankfully, while the 2007 energy plan called for a complete overall of the royalty regime, the generic regime is still in place. Given the rate the current crowd do things, we wouldn’t see a royalty regime to replace the current one for decades. As it is, the existing, pre-2003 royalty regimes – not the Old Man’s tweaks – are producing the lion’s share of offshore cash these days.