North Sea oil firms have underlined their belief in the value of new field developments in the area in spite of calls for a halt on activity, after the price of Brent crude rose above pre-pandemic levels.
Jersey Oil & Gas said it has had interest from ‘multiple parties’ after launching a hunt for partners to fund work on a major new production complex in the Moray Firth.
Israeli-owned Ithaca Energy said it has submitted a plan to develop the Abigail field for regulatory approval, as it posted a $220 million (£155m) first quarter profit.
The news from the firms came amid growing calls from environmentalists for exploration and development activity to be halted in the North Sea.
Campaigners were boosted last month when a global energy industry watchdog said there should be an immediate end to new fossil fuel developments, including those involving oil and gas fields.
The International Energy Agency said the results of the efforts made by governments so far to tackle climate change would likely fall well short of what would be needed to achieve net zero targets.
However, on Tuesday BP chief executive Bernard Looney insisted the world would need oil and gas for decades to come amid what was likely to be a long transition to a cleaner energy system.
BP has said the North Sea is one of the core oil and gas regions from which it expects to generate the profits required to invest in areas such as wind power.
READ MORE: BP boss highlights value of North Sea oil and gas industry amid energy transition
Brent crude sold for $71.35 per barrel yesterday afternoon, up $1.10/bbl on the day. It sold for around $70/bbl in January last year.
The price has almost doubled since November amid hopes that coronavirus vaccines will fuel a strong recovery.
Market sentiment was boosted on Tuesday when members of the Opec + grouping of exporting states decided that curbs on production should only be eased slightly. The curbs were imposed last year after oil prices plunged amid the fallout from the pandemic.
Jersey Oil and Gas said its proposed Greater Buchan Area development was consistent with the UK’s net zero drive.
The company expects to power the platform using electricity rather than the gas-fired generators that are commonly employed.
Chief executive Andrew Benitz said: “Our chosen development concept ensures that, through electrification, the GBA Development could produce less than 1kg of CO2 per barrel produced; fully aligned with the UK’s “Net-Zero” targets.”
The first phase of the proposed development would involve restarting production from the Buchan field.
Buchan was shut down in 2017 after the then operator, Repsol Sinopec Resources UK, decided it made commercial sense to decommission the associated production facilities.
Studies completed by Jersey suggested the field could still contain around 130 million barrels.
Jersey has set out to recruit a partner to help fund the costs of the GBA development, through a farmout process.
The company said yesterday: “The GBA farmout process … has received broad interest and participation from multiple parties. With the diligence process ongoing it is premature to comment further on the process at this stage."
The plan for GBA also includes the development of the Verbier find that Jersey made in 2017 with Norway’s Equinor, which was called Statoil at the time.
The field generated excitement in the industry amid the last downturn. However appraisal drilling suggested it was smaller than hoped. Equinor sold its stake in the acreage to Jersey in January last year.
READ MORE: Oil giant loses interest in find that galvanised industry
In a summary of highlights of the first quarter, Ithaca Energy noted it had submitted a field development plan for Abigail to the Oil and Gas Authority. It plans to link Abigail to facilities installed for the Stella field, which was brought into production in 2017.
In April Ithaca approved a £400m plan to try to increase production from the Captain field north east of Aberdeen.
Ithaca acquired a stake in Captain with a $2bn North Sea portfolio it bought from America’s Chevron in 2019.
Ithaca was acquired by Israel’s Delek in a £1bn deal in 2017. The company’s first quarter profit was in line with the same period last year. Delek said in January that it was considering a plan to float Ithaca on the London and Tel Aviv stock exchanges.
Former Ithaca Energy boss Les Thomas became a director of Jersey Oil & Gas in April.
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