NORTH Sea oil and gas entrepreneur Andrew Austin has shown faith in the long term potential of the area by agreeing to buy stakes in big gas fields off Shetland from French giant TotalEnergies in a deal that could be worth more than $150 million (£110m).
Kistos has agreed to buy 20 per cent interests in four producing fields in the West of Shetland area from TotalEnergies following a competitive auction.
The portfolio includes stakes in the Laggan and Tormore fields which were brought into production in 2016. It also includes an interest in the Glendronach find, which generated excitement when it was made in 2018, and the Benriach prospect.
READ MORE: Oil giant highlights potential of huge find off Shetland after Cambo furore
Kistos is led by Andrew Austin, who sold North-Sea focused RockRose Energy for £250m to Viaro Energy in 2020.
Mr Austin developed RockRose by acquiring North Sea assets that bigger fish lost interest in. The downturn that started after the oil price plunged in 2014 created the opportunity to buy quality assets at attractive valuations.
He launched Kistos late in 2020 amid the plunge in oil and gas prices that was triggered by the coronavirus crisis. Some firms have been shifting investment from oil and gas into renewables as they look to show that they can support the transition to a lower-carbon energy systems. Environmental campaigners have called for curbs to be imposed on oil and gas activity.
However, Mr Austin made plain that he thinks the production from the fields Kistos is buying into will be in demand for some time, along with output from assets the company has already acquired in the Netherlands. He said of the deal with TotalEnergies: “On completion, we will have a solid foothold in both the UK and the Netherlands from which we can continue to implement our growth strategy.”
READ MORE: Risk of reliance on wind power underlined by Scottish Government report
Oil and gas prices have surged in recent months amid the recovery in demand that has followed the easing of lockdown measures around the world.
TotalEnergies will retain 40% interests in producing fields covered by the Kistos deal. It has been investing heavily in renewable energy assets.
Kistsos has agreed to pay an initial $125m with up to a further $40m payable depending on gas price movements. More may be due if Benriach is developed.
Kistos said it expects its share of production from the assets to be acquired to average approximately 6,000 barrels oil equivalent per day during 2022, with associated reserves totalling 6.2 million barrels of oil equivalent.
READ MORE: Shell to pay billions to investors after rise in profits amid gas price surge
In December Kistos said it was participating in a sale process that TotalEnergies was running in respect of West of Shetland gas assets and that it had been considering other opportunities.
TotalEnergies has invested heavily in developing a portfolio of renewable energy assets which includes stakes in projects off Scotland.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel