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North Sea asset swap agreed

ENTERPRISE Oil and BP have agreed on a #100m asset swap which will help Enterprise consolidate its oil interests in the central North Sea while BP beefs up its gas reserves in the southern part of the sector.

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The deal involves three fields, with each company giving and receiving reserves of about 100 million barrels of oil equivalent. The agreement is expected to be finalised by early June, after both the Department of Trade and Industry and co-venturers from each of the fields have given their blessings. Enterprise is set to receive BP's 42.79% interest in the Pierce oil field, which is located about 280km east of Aberdeen, in exchange for 24.05% of the Amethyst gas field and 13.5% of the Ravenspurn North gas field. ''This is good news for both companies,'' Enterprise technical director Mark Hope said. ''Enterprise will be able to maximise the potential of Pierce through our experience in the central North Sea, while BP will be able to derive greater value from the assets in which they are already significant players.'' Enterprise will take over from BP as operator of the Pierce field as its stake in the venture will jump from 31.2% to 73.99%. For its part, BP's share in Amethyst will rise from 21.45% to 45.5% while its interest in Ravenspurn will go from 20% to 33.5%. As one Enterprise spokesman described it, the deal is a swap of ''new oil for old gas''. While Pierce is still in the planning development phase, Amethyst and Ravenspurn North have both been producing gas since 1990. London-headquartered Enterprise is looking to downsize its interests in the gas-producing southern sector of the North Sea, and therefore Amethyst and Ravenspurn are not considered central to the company's overall operations. About 80% of Enterprise's total reserves are oil, with that figure rising to roughly 85% after the deal with BP is completed. BP will be operator of the Amethyst field, which along with Ravenspurn is located north-east of Great Yarmouth. In addition to BP's 45.4% stake, other companies with an equity share in the gas field include British Gas E&P with 24.15%, Arco with 14.1%, Murphy with 7.4%, Amerada Hess with 6.48% and Fina with 2.47%. Although BP will have a 33.5% slice of the Ravenspurn North gas field, the operator will continue to be BP, which has an 18% share in the venture. Other investors in Ravenspurn North are PowerGen with 12%, Hardy with 8%, Monument with 6% and Enterprise Oil, which will retain a 2.5% stake. Pierce is likely to be developed via a floating production, storage and offloading (FPSO) vessel tied back to wells located at two subsea centres. Project sanction is expected in the middle of this year with the first oil produced in the third quarter of 1998.

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