Serica recruitment drive being planned

Deal for three BP interests could propel company

Serica Energy’s newlyappointed boss has said the acquisition of stakes in three North Sea fields from BP would catapult the firm into a “different league”.

Mitch Flegg, named Serica’s chief executive yesterday, said the company had plans for a recruitment drive and a base in Aberdeen.

Mr Flegg added having a presence in the Granite City would help Serica expand and add to its North Sea portfolio.

He was speaking after the London-headquartered firm revealed a deal for BP’s interests in the Bruce, Keith and Rhum fields.

Serica will pay £12.8million upfront along with a share of cash flows over the next four years.

It will also cover 30% of BP’s post-tax decommissioning costs and make several contingent payments based on the performance of the assets and future oil prices.

Overall, BP expects to net £300million from the deal.

The sale is expected to go through in the third quarter of 2018.

The acquisition will help Serica reduce its reliance on production from the Erskine field, located 150 miles east of Aberdeen.

Serica completed a deal to buy its 18% non-operated stake in Erskine in June 2015. But Serica’s income in 2016 was dented by a prolonged shut-in on Erskine after a pipeline became blocked.

Serica chairman Tony Craven Walker said in September that the firm needed to “spread the risk” beyond the Erskine field by developing its North Sea assets and beefing up its portfolio.

The latest deal with BP will give Serica 36% of Bruce, 34.84% of Keith and 50% of Rhum, all on an operated basis.

Serica said the assets would increase its reserves sixteen-fold to 50million barrels of oil equivalent and its production seven-fold to more than 21,000 barrels per day.

About 110 BP staff mem- bers will transfer over to Serica with the assets, but Mr Flegg believes the company will need to increase its headcount even further.

Mr Flegg also said Serica had learned a lot from being a partner in Erskine, but that the company’s management feel they can achieve more as an operator.

Mr Flegg, who initially worked for Serica from 2006-15 before having a spell at Circle Oil, said the company could get a lot out of the new package of assets with “modest but focused investment”.

“The company will need to increase its headcount even further”

BIG PLANS: New Serica Energy chief executive Mitch Flegg said the company will have to increase staff numbers