Page 16 - EurOil Week 12 2022

EurOil NEWS IN BRIEF EurOil

investors. template on each structure. In April 2020 Waldorf will also take upon itself all
The company’s management estimates Shell extended the FPSO contract to March future field abandonment liabilities such
that the transaction will be completed in 2022. that on completion MOL said it would
the second quarter of the current year. According to Norsk Petroleum, “derecognize provisions of around USD 350
The production will not begin Knarr produces oil from Lower Jurassic million.”
before 2026, Energy Minister Virgil sandstone in the Cook Formation, from MOL also said its average lifting cost
Popescu estimated, commenting on the the reservoirs located at a depth of 3,800 would improve following the completion of
development. meters. the transaction, as the production costs of
Shareholders’ explicit approval is Produced oil is processed and stored on the UK assets exceed the average lifting costs
needed for a second time because since the Knarr FPSO and offloaded to shuttle of the rest of MOL’s E&P portfolio.
the previous consent certain clauses of the tankers for export. Gas is exported via The closing of the transaction is subject
sale-purchase agreement were adjusted, the Far North Liquids and Associated Gas to obtaining necessary approvals and is
especially those concerning certain tax System (FLAGS) to St Fergus in the UK. expected to take place in the second half of
risks, the management explained. A decommissioning plan was submitted 2022, MOL said.
According to sources familiar with the to the Norwegian authorities in 2020, and
deal consulted by Profit.ro, those tax risks the Petroleum Safety Authority (PSA) has
are related to the obligation to pay a share this week said it has given A/S Norske Shell UK sanctions Gazprombank,
transaction tax in the Bahamas, where consent for the removal of and disposal of
Exxon’s investment vehicle subject to the the facilities from the field. Alfa Bank and Sovcomflot
deal is registered. The Norwegian Petroleum Act requires
The price of the deal was maintained at the developer of a field to pay for and The UK froze the assets of Russia’s
$1.06bn, which can be positively adjusted to carry out – including full or partial Gazprombank and Alfa Bank, and the state-
by a maximum of $10mn, while a negative removal of facilities and equipment after run shipping firm Sovcomflot FLOT.MM, in
price adjustment is not limited. the production period has ended. its latest round of sanctions announced on
Upon signing the sale-purchase While the removal of the Samsung-built Thursday.
agreement, Romgaz will have the FPSO from the field will mark the end of They were among 59 individuals and
obligation to pay the sellers an amount the production from the Knarr field, it entities added to the sanctions list which has
equal to $106mn representing an advance does not necessarily mark the end of the been used to target Moscow since Russia
payment/deposit. FPSO life. invaded Ukraine.
After satisfying the conditions Gazprombank is one of main channels for
precedent required to complete the payments for Russian oil and gas.
transaction, as stipulated in the sale- MOL sells UK North Sea Alfa-Bank is one of Russia’s top private
purchase agreement, Romgaz shall pay lenders, controlled by Mikhail Fridman, who
the amount representing the difference assets to Waldorf was sanctioned by Britain earlier this month,
between the acquisition price and the and his partners.
advance payment/deposit paid upon Hungarian oil and gas company MOL has Among the individuals sanctioned were
signing the sale-purchase agreement.. signed a deal to sell its entire upstream oil tycoon Evgeny Shvidler, founder of
portfolio in the UK North Sea to Waldorf Tinkoff bank Oleg Tinkov and German Gref,
Production. the CEO of Russia’s largest bank Sberbank,
Shell given OK for Knarr 20% stake in the Catcher field, a 50% stake Britain said it was also targeting Polina
The divested offshore assets include MOL’s the Foreign office said.
FPSO removal in Scolty & Crathes, and a 21.8% stake in Kovaleva, who it said was the stepdaughter
Scott as well as stakes in a number of other
of Russia’s foreign minister Sergei Lavrov.
Oil major Shell has received regulatory licenses. The government said she reportedly owns a 4
approval for the removal of the Petrojarl MOL said its UK working interest million pound property in London.
Knarr FPSO and seabed structures on the production peaked above 18 mboepd in “Putin should be under no illusions –
Knarr field, offshore Norway. 2019 and has been falling in the last two we are united with our allies and will keep
Discovered in 2008, Knarr is a field years, with fourth-quarter 2021 production tightening the screw on the Russian economy
in the northern part of the North Sea, 50 marginally above 12 mboepd. MOL’s to help ensure he fails in Ukraine,” Foreign
kilometers northeast of the Snorre field. It corresponding proved and probable reserves Secretary Liz truss said. “There will be no
started production in 2015 via the Petrojarl (SPE 2P) amounted to 14.9 MMboe at the let-up”.
Knarr FPSO, which has an oil production end of 2021. The sanctions also targeted Russian
capacity of 63,000 b/d. The water depth at According to MOL, Waldorf offered a Railways, and defense company Kronshtadt,
the site is 400 meters. base cash consideration of $305 million, the main producer of Russian drones. Private
The development, which will soon cease which is subject to customary purchase price military contractor Wagner Group has also
production, comprises the Petrojarl Knarr adjustments and is based on an economic been sanctioned.
FPSO and two subsea templates, including effective date of January 1, 2021. In addition,
six wells for production and injection. the agreement contains an earn-out scheme
The Knarr field consists of two segments, mainly dependent on oil prices during 2022-
Knarr West and Knarr Central with one 2025.

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