Development of the Hudson field took place over the period December 1992 to January 1995. This was a time of generally low oil prices and one in which the combined effects of oil price, smaller discoveries and diminishing reserves but increasing development and operating costs, were being faced by the industry.
The Hudson field development was conceived under these circumstances and demanded that a cost effective solution be identified in order to make the development viable. Initial studies of conventional stand-alone and tie-back options, whilst endorsing the commerciality of the project, failed to maximise its economic potential or to meet the business-driven objectives of the co-venturers. In light of this, an innovative two-phase development was devised, utilising a leased FPSO for the first phase of production and a subsea tie-back to the Tern platform for the second phase. This gave the benefits of an optimised reservoir development plan for the second phase, minimum capital outlay at the front end and early production and generation of cash-flow, which effectively financed the main field development.
In addition to this novel facilities solution, the development also implemented many of the concepts which have since become synonymous with the industry's CRINE initiative, most notably the use of functional specifications, standard components, minimum operator intervention in contractor/supplier activities, minimum size of operator's management team and a novel contracting strategy, giving greatest opportunity for cost savings.
The net result of these various initiatives was completion of the facilities installation and commissioning two months ahead of the targeted first oil date and at a cost of 29% below the original budget.