Equinor has agreed to sell a 40.8125 per cent interest in and transfer operatorship of the Bressay oil field development on the UK continental shelf to EnQuest.
The initial consideration is GBP 2.2 million ($2.9 million), payable as a carry against 50 per cent of Equinor’s net share of costs, with a contingent consideration of $15 million following authority approval of a field development plan for Bressay, Equinor said on Friday.
“This transaction supports Equinor’s strategy to continually optimise our portfolio. We welcome EnQuest as the new operator of Bressay and believe the knowledge and experience both parties can share from our existing Mariner and Kraken developments will further strengthen the project”, said Arne Gürtner , Equinor’s senior vice president for UK & Ireland offshore.
The Bressay oil field was discovered east of Shetland in 1976 and Equinor became operator in 2007.
The concept selection for the field development was deferred in 2016 due to challenging market conditions and the need to simplify the development concept.
In a separate statement on Friday, EnQuest said that a number of development scenarios are under consideration, including a potential tie-back to Kraken, reducing emissions, costs and extending its field life.
If developed via Kraken, Bressay produced gas may be used for fuel for the FPSO, reducing carbon emissions over the longer term, EnQuest added.
“Equinor will continue to be the U.K.’s leading energy supplier, and we are committed to delivering oil, gas, wind power and hydrogen to the country – playing our role in creating jobs, boosting investment and lowering carbon emissions”, said Gürtner.
The transaction is subject to customary conditions, including partner and authority approval, with an estimated completion date in 4Q 2020.
Following completion, EnQuest will have a 40.8125 per cent interest and operatorship, Equinor will have 40.8125 per cent, with Chrysaor retaining an 18.375 per cent interest.
EnQuest will assume the operatorship following the plugging and abandonment of the 3/28-1 well by Equinor.
EnQuest Chief Executive, Amjad Bseisu , said: “With the addition of up to 115 MMbbls of net 2C resources, Bressay provides EnQuest an opportunity to demonstrate its proven capabilities in low-cost drilling, near-field and heavy oil development.
“The heavy oil skills and knowledge the Group has acquired from Kraken will help us unlock the potential of this large 1 billion bbl oil in place field”.