Jersey’ s pos­i­tive take as Equinor re­ject GBA stake

Oil & gas: Nor­we­gians’ snub en­ables us to ex­ploit value of area, says min­now

The Press and Journal (Aberdeen and Aberdeenshire) - - BUSINESS - BY MARK LAMMEY

North Sea min­now Jersey Oil and Gas has in­sisted its Greater Buchan Area (GBA) project is “very ex­cit­ing”, de­spite Equinor turn­ing down a stake in the acreage.

The Nor­we­gian en­ergy gi­ant had a three-month op­tion over a 50% eq­uity in­ter­est in blocks con­tain­ing the Buchan field and J2 dis­cov­ery, whol­ly­owned by Jersey.

Lon­don-listed Jersey said Equinor’s snub gave it greater “flex­i­bil­ity and con­trol”, and “full value po­ten­tial” on the project.

Bosses at Jersey believe a to­tal of 144 mil­lion bar­rels

“Their de­ci­sion not to ex­er­cise op­tion pro­vides us with greater flex­i­bil­ity ”

of oil could be pro­duced through a new, wider Buchan area de­vel­op­ment.

That would make it the “largest new-area hub” in the UK cen­tral North Sea since Golden Ea­gle, 45 miles north-east of Aberdeen.

Op­er­ated by Chi­nese firm Cnooc, Golden Ea­gle com­manded £2 bil­lion of in­vest­ment and came on stream in 2014. It was ex­pected to pro­duce 140 mil­lion bar­rels over 18 years.

Jersey, whose shares dropped by more than 11% yes­ter­day, has now started con­cept ap­praisal and se­lec­tion ac­tiv­i­ties for the GBA.

The com­pany pre­vi­ously said it would look for other in­dus­try part­ners and “al­ter­na­tive fund­ing op­por­tu­ni­ties” if Equinor de­cided not to ex­er­cise the op­tion.

Jersey in­tends to de­velop a num­ber of as­sets in the area, us­ing the Buchan field as a fo­cal point.

The Buchan field came on stream in 1981, but pro­duc­tion halted in 2017 be­cause the Buchan Al­pha plat­form was un­safe and had to be re­moved by then­op­er­a­tor Rep­sol Sinopec Re­sources UK.

Jersey, which now op­er­ates Buchan, reck­ons the field can pro­duce a fur­ther 80 mil­lion bar­rels of oil over 20 years.

And the firm hopes to tie its nearby J2 and Glenn dis­cov­er­ies back to a Buchan hub in the outer Moray Firth.

The Equinor-op­er­ated Ver­bier dis­cov­ery, 18%-owned by Jersey, could also be a tie-back op­tion.

In­de­pen­dent es­ti­mates pro­vided by Rock­flow Re­sources sug­gest that Buchan, J2 and the Capri prospect could yield 95m bar­rels net to Jersey.

Jersey chief ex­ec­u­tive An­drew Benitz said the com­pany con­tin­ued to en­joy a strong work­ing re­la­tion­ship with Equinor, which be­gan when Equinor farmed into the li­cence con­tain­ing Ver­bier in 2016. Mr Benitz said: “It was as a re­sult of this col­lab­o­ra­tion that we of­fered them, at this early stage of the project, a 90-day op­por­tu­nity to par­tic­i­pate in our GBA plans.

“Their de­ci­sion not to ex­er­cise the op­tion pro­vides us with greater flex­i­bil­ity, con­trol and the full value po­ten­tial of this very ex­cit­ing new area de­vel­op­ment project, which based on our es­ti­mates of dis­cov­ered oil vol­umes has the po­ten­tial to be the largest new-area hub in the UK cen­tral North Sea since Golden Ea­gle.

“We have ini­ti­ated the ap­praise and se­lect phases of our field de­vel­op­ment plan (FDP).

“As we progress to de­fine and se­lect the best de­vel­op­ment con­cept, we will con­sider farm-outs for value to in­dus­try part­ners prior to sub­mit­ting FDP in 2022.”

WELL PLACED: The Buchan field, which came on stream 38 years ago, may still yield 80 mil­lion bar­rels of oil, says Jersey

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