North Sea firm sees potential in £1bn project

NORTH Sea-focused Jersey Oil & Gas has underlined the potential of a plan to restart production from an old North Sea field as part of a project it reckons could generate returns worth around $1.7 billion (£1.2 billion).

Jersey Oil & Gas has been working on plans for the £1bn Greater Buchan Area development amid challenging conditions following the plunge in oil prices triggered by the coronavirus crisis.

The project involves bringing the Buchan field in the Moray Firth back into production. Buchan was shut down in 2017 after the then operator, Repsol Sinopec, decided it made commercial sense to decommission the associated production facilities.

Jersey said the results of a comprehensive assessment of the proposed scheme suggested the Greater Buchan project could generate strong enough returns to ensure investment in the project was recovered within less than three years.

The project will involve linking Buchan and finds made nearby to a new production facility.

Jersey unveiled the results of the assessment yesterday as it launched a search for partners to help share the costs of the development, through a farm-out process.

The results of the exercise will be followed with interest in the North Sea as the industry in the area faces an uncertain future.

The downturn in oil and gas markets triggered by coronavirus has prompted firms to cut their exposure to the North Sea.

Sector-watchers have noted that some investors are shifting their attention to firms focused on renewables from fossil-fuel producers amid the global drive to reduce carbon dioxide emissions.

Jersey Oil & Gas chief executive Andrew Benitz said the Geater Buchan Area project appealed on economic and environmental grounds.

The company plans to use electricity from onshore sources to power the platform, to eliminate carbon dioxide emissions associated with power generation.