Page 4 - EurOil Week 18 2021

EurOil COMMENTARY EurOil

Spirit’s moves illustrate

North Sea trends

Spirit Energy is one of several companies that have been

adding production in the North Sea recently, and its projects

illustrate some of the broader trends at play in the region

NORTH SEA A number of companies are embarking on new The regulator recommended that Spirit and
oil and gas projects in the North Sea. Prominent its then-partner Hague and London Oil (Halo)
WHAT: among these is the UK’s Spirit Energy, which has should keep looking for alternative export
Several companies, made various other announcements over the routes. Halo subsequently exited the Greater
including Spirit Energy, past couple of weeks relating to activity in both Pegasus Area, and Neptune has now agreed
are developing new the UK and Norwegian sectors of the North Sea. to use Cygnus after all upon farming into the
production in the North This week, Spirit and Neptune Energy said project.
Sea. they had agreed to partner on the development The partners are aiming to make a final
of the Pegasus West gas discovery in the UK’s investment decision (FID) on Pegasus West
WHY: Southern North Sea. This marks the end of a within the next 12 months. Upon reaching FID,
Subsea tiebacks and dispute between the two companies over how Spirit will hand over the operatorship of Pegasus
additions at existing the project should be developed. West to Neptune.
offshore projects have Under the new partnership, Neptune will “As a subsea tieback to Cygnus, Pegasus West
become popular options. farm into Pegasus West, acquiring a 38.75% will be a great example of how we can build on
equity stake in the discovery and surrounding the UK’s existing infrastructure, maintain secu-
WHAT NEXT: acreage. This means Neptune and Spirit will rity of supply and reduce our carbon intensity,”
Spirit and Neptune have the same equity split on Pegasus as they do stated Spirit’s executive vice-president of sub-
Energy are targeting a on the nearby Cygnus gas field at 38.75% and surface and non-operated UK assets, Gerry
final investment decision 61.25% respectively. Harrison. “With an estimated 83bn cubic feet
on the Pegasus West gas Spirit had previously hoped to tie Pegasus [2.4bn cubic metres] of recoverable gas at
project within a year. back to Cygnus, but this plan was blocked by Pegasus West, it adds further volumes to the
Neptune, which said at the time that the plat- Greater Cygnus Area and we are looking for-
form would not have enough capacity. In 2019 ward to working with Neptune to bring this
the UK Oil and Gas Authority (OGA) inter- development through to production.”
vened in the dispute between the two firms over
the use of Cygnus – which is operated by Nep- Busy period
tune despite its smaller stake in the field – for The news also marks the continuation of a busy
developing Pegasus West. period for Spirit, which is majority-owned by

Under the new
agreement, Pegasus
West will be tied back
to Cygnus after all.

P4 www. NEWSBASE .com Week 18 06•May•2021