Page 17 - EurOil Week 23

EurOil PROJECTS & COMPANIES EurOil

Egdon nears farm-out deal

with Shell

UK EGDON Resources announced on June 8 it had seismic costs up to a cap of $5mn, after which
secured licence extensions from the UK Oil & point its share will fall to 70%. The major will also
Gas Authority (OGA) for two North Sea gas pay for 100% of studies and manpower expenses
finds, taking the London-listed explorer closer up to a final investment decision (FID) being
towards sealing a farm-out deal with Royal taken on a well.
Dutch Shell. “We look forward to building on our close
The junior agreed in January to hand over working relationship with Shell and benefitting
70% shares in and operatorship of its 100%- from their substantial worldwide operational
owned P1929 and P2304 licences in the south- experience and expertise, notably the devel-
ern North Sea, containing the Resolution and opment of carbonate reservoirs characteristic
Endeavour gas fields, to Shell. In exchange, the of the Resolution and Endeavour discoveries,”
Anglo-Dutch major pledged to cover the lion’s Egdon’s managing director Mark Abbott said in
share of appraisal costs. a statement.
The condition for Shell’s investment was that The Resolution find was made by France’s
a mutually acceptable forward work programme Total back in 1966 and is estimated by Schlum-
and timeline were agreed with the OGA. berger to contain 6.54bn cubic metres of con-
In a statement on June 8, Egdon said the initial tingent gas resources. Endeavour is far smaller,
terms of the licences had been extended by four comprising only 510mn cubic metres of gas.
years until May 31, 2024. In return, Egdon and its Prior to the oil price crash, Shell was one
would-be partner must acquire 400 square km of of the few oil and gas majors still looking at
3D seismic data at the two sites by May 31, 2021, new opportunities in the North Sea. Last year
and commit to drilling a well by November 2022. it farmed into two other southern North Sea
“We will now progress the assignment of the licences belonging to London-based Cluff Nat-
licence interests and operatorship of the licences ural Resources. Cluff and Shell remain com-
to Shell,” Egdon said. mitted to drilling at those projects, but have
Under the deal, Shell will cover 85% of delayed one well until 2022. ™

Eni splits clean energy business

from oil and gas

ITALY ITALIAN oil major Eni has announced plans to energy transition. An irreversible path that will
separate its renewables operations from its oil make us leaders in decarbonised energy prod-
Eni says the move and gas business, saying the move will put it on ucts,” CEO Claudio Descalzi commented. “With
will put it on “an “an irreversible path” to decarbonisation. our new plan, in February, we have set our path
irreversible path” to A division called Energy Evolution will be for the next 30 years, as of today it is unique in
decarbonisation. “dedicated to supporting the evolution of the our industry.”
company’s power generation, product transfor- The oil industry has faced mounting pres-
mation and marketing from fossil to bio, blue sure over the past few years to address climate
and green,” Eni said in a statement on June 4. It change seriously. Companies have responded
will be led by Eni’s current CFO Massimo Mon- by announcing ambitious targets to decarbon-
dazzi, who is stepping down from that role on ise their operations over the coming decades,
August 1. although many green groups say the measures
Meanwhile, Natural Resources will be set up go nowhere near far enough.
to manage Eni’s oil and gas activities, overseen by Oil markets now face massive upheaval, fol-
the company’s current upstream head, Alessan- lowing a collapse in demand triggered by the
dro Puliti. While still focusing on value creation, coronavirus (COVID-19) pandemic. Many
it will still look to reduce the carbon footprint leading companies, including Eni, swung to a
of the business by increasing energy efficiency, loss in the first quarter. Despite this financial
continuing the shift from oil to gas production pressure, many insist that their green commit-
and developing carbon-capture projects. ments will be kept. For instance, BP, which this
The restructuring will be implemented over week announced it would lose “close to 10,000”
the coming weeks, Eni said. of its staff to stem losses, still intends to spend
“This new structure reflects Eni’s pivot to the $500mn this year on low-carbon activities. ™

Week 23 11•June•2020 www. NEWSBASE .com P17