Page 19 - Euroil Week 20 2020

EurOil
NEWS IN BRIEF
EurOil
Through the transaction, NEO acquires a material, cash generative portfolio of assets in four producing areas of the
UK North Sea, with an average 2019 production of approximately 23,000 boepd and substantial development upside, Hitecvision and NEO said.
In addition, the portfolio adds reserves of 51mn boe to NEO Energy. The transaction includes operatorship of two asset clusters, the Quad 15 and Flyndre areas, and an operator organization of more than 80 employees and contractors.
JOG Takes acquires Verbier from Equinor
Jersey Oil & Gas has completed the acquisition of operatorship and a 70% working interest from Equinor in the UK North Sea license containing the Verbier discovery in the UK from Equinor.
The consideration for the acquisition consists of two milestone payments and
a royalty based on volumes produced from the Verbier Upper Jurassic (J62-J64) reservoir oil discovery.
As previously reported, JOG will pay $3mn to Equinor upon sanctioning by the UK’s Oil & Gas Authority (OGA) of the Verbier Field Development Plan (FDP), and it would pay $5mn upon first oil from the Verbier Field.
Furthermore, there are certain royalty payments on the first 35mn barrels of oil produced from the Verbier Field calculated on the basis of a 70% working interest for on-block volumes.
JOG said on May 20 that the acquisition provided JOG with an opportunity to create significant value through potentially developing the Verbier discovery as part of the Greater Buchan Area (“GBA”) hub.
The company said that the Licence P2170, in which the Verbier find is located, also benefits from multiple material exploration prospects that have high-value potential through tie-backs to the proposed new GBA hub.
Andrew Benitz, CEO of Jersey Oil & Gas, commented: “I am pleased that JOG has completed this important step to acquire an additional interest and operatorship in the Verbier discovery together with material exploration upside to facilitate our plan
to develop Verbier as part of our GBA development. We continue to make solid progress on concept select for the GBA and work closely with contractors, other area stakeholders and the OGA on this important project.”
Equinor had farmed into Verbier back in 2016, taking 70 percent stake for around $2mn and a commitment to fund all costs up to US$25mn in respect of the first
exploration well.
Spirit energy hires PD&MS for complex E&P modifications
Aberdeen-based engineering and design firm PD&MS has been awarded a new three-year contract with options for a further three-year extension with oil company Spirit Energy.
The deal, worth an undisclosed multimillion-pound sum, will see PD&MS deliver complex modifications for the E&P business.
The engineering, procurement, construction, and commissioning firm
has worked with Spirit Energy since 2018, providing decommissioning support in the Morecambe Bay area.
“Building on this existing relationship, the new contract will see PD&MS carrying out campaigns both onshore and offshore in the execution of Spirit Energy’s complex modifications delivery strategy,” PD&MS said, without providing specifics on the assets it will be working on.
Donald Martin, contract owner for Spirit Energy said: “Complex modification projects have the potential to generate significant value through maximising the life of our assets. Together with PD&MS
we are working to develop credible and predictable investment opportunities which will enhance recovery, lower operating costs, and optimize our project execution model.”
Norwegian oil output higher than expected in April
Norwegian oil production increased more than expected in April, the Norwegian Petroleum Directorate (NPD) said on May 20, while forecasts for the remaining year’s production were cut in line with the government’s decision following May’s OPEC+ meeting.
The country’s crude oil production rose by 4.5% month-on-month from March
to 1.78mn barrels per day (bpd), beating official forecasts by 1.8%. It rose 30.1% year- on-year, mainly thanks to the ramp-up of Equinor’s giant Johan Sverdrup oilfield.
Daily natural gas output fell by 13% month-on-month, missing the official forecast by 3.7% and was down 10.6% from a year ago. Overall monthly gas output in April totalled 9.0bn cubic meres (bcm).
NPD also updated its monthly production forecast for the rest of the year to reflect Norway’s oil production cuts,
as well as the delayed start-up of several fields, including Equinor’s Martin Linge and
Repsol’s Yme.
Output in June is now expected to be at
1.61mn bpd, and for the rest of the year at 1.73mn bpd, in line with the government- set output ceiling.
The oil ministry has said it would mean that Norway would cut output by 250,000 bpd in June and by 134,000 bpd during the second half of the year.
The revised NPD forecast for June, however, is just 50,000 bpd lower compared to the view from the beginning of the year.
Analysts have previously said that
the government-announced cuts will be lower in reality due to an inflated baseline, a ramp-up of Sverdrup, and summer maintenance.
The government said the announced cuts were made from a reference point of 1.86mn bpd, a level it previously expected to reach by the end of 2020.
The revised forecast showed output in December to be 148,000 bpd lower from the previous view, reflecting delays in starting new developments.
Bulgaria’s anti-monopoly
body seals offices of oil and
gas association
Bulgaria’s Commission for Protection of Competition on May 20 said it has sealed the offices of the Bulgarian Oil and Gas Association over suspected collusion among its members in setting fuel prices.
CPC decided to carry out an unexpected inspection on May 20 aiming to find out how fuel prices are being set by several companies, including Lukoil Neftochim Burgas, Lukoil Bulgaria, Saksa, Insa Oil, Rompetrol, Shell Bulgaria, OMV Bulgaria, Petrol and several other companies.
CPC launched an investigation in April after a signal from the Supreme Administrative Prosecution. Meanwhile, the government found out that fuel prices charged to buyers are higher than the prices at which the fuel is released from warehouses.
Several previous investigations by CPC found no proof of collusion on the fuel market. Meanwhile, the government decided to set up state-owned gas stations that would force the companies to lower their prices.
The sealing of the offices comes days after Lukoil Bulgaria announced it may be forced to stop operations due to proposed legislation changes that would require it to split its single tax warehouse into six separate regional units. The legislation changes were subsequently adopted.
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