Jersey’ s positive take as Equinor reject GBA stake
Oil & gas: Norwegians’ snub enables us to exploit value of area, says minnow
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