AN Israeli oil firm has highlighted the amount of money it is making in the North Sea amid the downturn in the area triggered by the coronavirus crisis.

A range of firms have slashed spending in the North Sea after the lockdowns imposed to slow the spread of the virus sent demand for oil plunging.

However, Delek Group said its Aberdeen-based Ithaca Energy operation is generating huge amounts of cash that can be used to fuel the growth of the group.

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“Ithaca is an important anchor for the group, and a growth engine for its continued activity and for unlocking value,” said Delek chief executive Idan Wallace.

He added: “In 2020, Ithaca performed well, which was reflected, inter alia, in significant dividends of $120 million in the course of the year, in a period when almost no energy company distributed dividends to its shareholders.”

Delek appears to have provided a strong vote of confidence in the North Sea at a time when the outlook for the area is uncertain.

In January the group said it was considering floating Ithaca on the London and Tel Aviv stock exchanges as it moved to bolster its balance sheet.

After falling to a 20-year-low in April the Brent crude price has risen around 80 per cent since November amid hopes the roll out of coronavirus vaccines will fuel a global economic recovery this year.

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However, the price went into reverse again last week when the International Energy Agency warned that oil demand may not recover until 2023.

ExxonMobil sold the bulk of its North Sea portfolio in February for around $1 billion after concluding it could generate better returns on investment in the US shale market and offshore Guyana.

The sale continued a process which has seen US majors retreat from the North Sea, in which Delek has participated. The company backed Ithaca to acquire Chevron’s North Sea portfolio for $2bn in 2019.

Oil prices have fallen since then. However, as the market tanked in April last year, Ithaca said it expected to make big profits in the North Sea. It can produce oil and gas relatively cheaply.

Mr Wallace was speaking yesterday following publication of an expert report that underlined the potential value of Delek’s North Sea position.

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The report found the cash flows the North Sea business could be expected to generate would be worth around $3.8 billion in present value terms.

Delek acquired Ithaca in a £1 billion deal in 2017 to help build an international oil and gas business.

Following attacks on Saudi Arabian facilities earlier this month the Brent crude price rose above $70 per barrel for the first time since the Covid-19 pandemic started. Brent crude sold for $64.19/bbl yesterday afternoon.