Page 13 - EurOil Week 34 2021

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Ping consolidates control

of UK’s Avalon oilfield

MALAYSIA MALAYSIAN oil producer Ping Petroleum has extend its licence for Avalon beyond its current
struck a deal to buy the remaining 50% stake expiry date of June 2022.
Summit is looking to of the Avalon oilfield in the UK North Sea for Once the development plan is submitted,
shift away from the $17mn from Japan’s Sumitomo Corp. Ping intends to begin front-end engineering
fossil fuel business. Ping, a subsidiary of DNeX, is acquiring the design (FEED) work ahead of the targeted start
interest from Sumitomo’s subsidiary Summit of drilling in the third quarter of 2022. It will then
Exploration and Production. Ping bought the install and hook up a production facility by the
other 50% interest in Avalon from Sumitomo second quarter of 2023, with the aim of launch-
back in 2017, and the pair agreed to transfer ing production by July 2023.
operatorship to Ping the following year. Avalon would mark the first greenfield asset
“Since then, Ping has undertaken an exten- to be developed by Ping off the coast of the UK.
sive review of available development options and But the company has gained experience from
had recently decided on the appropriate devel- managing the Anasuria floating production stor-
opment concept,” DNeX said. age and offloading (FPSO) unit and associated
While neither Sumitomo nor Summit fields. It has worked on projects with seasoned
commented on the deal, DNeX said Summit international partners including ExxonMobil,
was looking to “shift away from the fossil fuel Royal Dutch Shell and Apache.
business.” Summit revealed in May it was Explaining the purchase, Ping said it was
looking for a buyer for the stake in Avalon as seeking to “avoid any potential conflicting
Sumitomo was striving to become “less car- decisions” which might arise if Summit sold its
bon intensive.” interest to another company. The deal will also
Avalon has some 15.5mn barrels of oil and increase the company’s reserves, and later its oil
4bn cubic feet (113mn cubic metres) of gas in production, significantly, it said. In addition, it
mid-case recoverable resources. Ping said that will mitigate portfolio risks for Ping by providing
having settled on a development concept, it a second revenue stream alongside that from the
would be engaging the UK’s upstream regulator, Anasuria cluster.
Oil and Gas Authority (OGA), this month, and The acquisition is subject to approval from
aimed to file the development plan by the end of the OGA, and is due to close by the end of Sep-
the year. If this is approved, Ping will be able to tember. ™

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