PRIVATE equity-backed Zennor Petroleum has agreed to buy a stake in a bumper North Sea field in a deal that will boost hopes independents could help kick start activity in the area following the crude price plunge.

Zennor said it has entered an agreement to buy the 8.9 per cent interest in the Britannia field 130 miles north east of Aberdeen held by Japanese conglomerate Mitsui.

The price of the deal was not disclosed. However, it looks likely to involve a significant investment by Surrey-based Zennor.

Britannia is operated by US giant ConocoPhillips, which describes the asset as one of the largest natural gas and condensate fields in the North Sea.

Mitsui acquired stakes in Britannia and the Alba field from BP in 2012 in a $280m deal.

Zennor said the acquisition will allow it to double output to 5,000 barrels of oil equivalent daily (boed), indicating production from Britannia is running at round 27,000 boed.

Managing director Martin Rowe said the acquisition was strategically significant for the firm.

Zennor expects to produce from the Finlaggan discovery nearby using a subsea link to the Britannia platform.

The company was awarded exploration acreage containing the Leverett discovery in the 30th UK licensing round recently. It thinks Leverett could be tied in to facilities developed for Finlaggan.

Mr Rowe said: “Creating core infrastructure hubs to deliver cost effective production is central to our approach. The ability to leverage the Britannia infrastructure will provide Finlaggan and the wider portfolio acquired in the 30th Round with a cost effective, fast-track route to production.”

Zennor’s move provides an example of how relatively small independents could play an important role in the drive to maximise recovery from the North Sea’s reserves.

The company is one of a number of North Sea-focused firms that won backing from international financiers who concluded the crude price plunge that started in 2014 had created opportunities to generate good returns in the area.

They calculated independents could capitalise on moves by bigger fish to reduce their exposure to the North Sea, by acquiring interests at attractive prices.

Some giants have shifted investment to other areas in response to the crude price plunge, while looking to raise cash to reduce debts and maintain payouts to investors.

Mitsui’s oil and gas portfolio includes significant holdings in US shale assets.

Under the deal agreed with Zennor, Mitsui will retain the majority of the decommissioning liability in respect of Britannia, up to an undisclosed cap.

Zennor secured $100m from Kerogen Capital in August 2015 to pursue an expansion drive focused on the UK North Sea.

Kerogen said then it could commit up to $400m. Managing partner Jason Cheng highlighted the favourable market dynamics in the UK citing attractive pricing for assets, substantial reductions in operating cost structures, and an increasingly favourable fiscal environment.

In April 2016 Kerogen invested around $60m in Hurricane Energy in support of the company’s pioneering exploration drive West of Shetland.

Hurricane raised £400m last year from investors to fund work on developing the Lancaster field, which is estimated to contain around 500 million barrels.

The rally in the crude price to $75 per barrel plus, from less than $30/bbl early in 2016, has strengthened the economic case for investing in the North Sea.

Mitsui retains the 13.3% stake in Alba it acquired in 2012.

Oil market experts at Bank of America Merrill Lynch predicted yesterday that prices should push higher heading into 2019, noting the impact of the collapse of Venezuelan production and reduced exports from Iran.

Opec members agreed late in 2016 to curb output to support the market