As the UK regulator has decided to prolong a license in alignment with another one in the area to pave the way for an integrated development plan, Aberdeen-based full-cycle energy business NEO NEXT+ Energy and its partners, Serica Energy and Jersey Oil & Gas (JOG), are expected to contemplate all available production solutions for a proposed oil project in the North Sea on the UK Continental Shelf (UKCS).
Jersey Oil & Gas has confirmed receipt of approval from the North Sea Transition Authority (NSTA) for an extension to the second term of the P2170 Verbier license as part of aligning the duration with that of the P2498 Buchan Horst ( Buchan ) license.
The company elaborates that the second term of a UK offshore oil and gas license sets the period in which the licensees are required to obtain a field development plan (FDP) approval for the area to subsequently move into the third term, which covers the development and production phase of activities for the life of a field.
Since the second term of the P2170 license has now been extended by approximately six months, to February 28, 2027, it is aligned with the corresponding duration of the P2498 Buchan license, reflecting the NSTA’s objectives for an integrated area plan, which the joint venture partners have always regarded as requiring a phased development solution led by the initial exploitation of Buchan’s resources.
Andrew Benitz , CEO of Jersey Oil & Gas, commented: “We are pleased to receive a licence extension on our existing Verbier licence, which now aligns the timing of both of our GBA licences, as we continue to work on engineering the optimal development solution for the area. As we have always highlighted, there is an exciting opportunity to unlock the resources across the area through the development of a Buchan-led production hub.
“We continue to urge the government to work constructively with industry on critical oil and gas development approvals and bring an early end to the Energy Profits Levy, which has unquestionably led to a significant slowdown in investment activity. The extended approval processes for developments that the UK’s regulatory landscape has created presents a complicated backdrop for progressing key projects.”
The firm emphasizes that a request to extend the second term of the Buchan license will be submitted to the NSTA towards the end of this year, incorporating an overall development schedule that includes a further extension request for the P2170 license.
The slowdown in Buchan development activities, resulting from ongoing industry uncertainties created by successive UK governments, has led to the optimal development solution being reassessed through a wider lens and with a longer execution schedule than initially envisaged.
While redeployment of the FPSO Western Isles was set out as the solution in the draft FDP submitted to the NSTA, Jersey underlines that it is now recognised that the passage of time means other potential production solutions warrant further screening and consideration.
“As part of its central objectives for managing the future resources of the UK North Sea, the NSTA is seeking to ensure that the GBA joint venture continues to look at the wider opportunity to connect volumes in the vicinity of a Buchan-based production hub as part of an integrated evaluation and plan with potential third-party resource owners,” highlighted the company.
According to the firm, work on these activities will continue into 2027 and the joint venture partners are in the process of establishing a work plan and budget for next year that will support progression of the GBA and the license extensions.
Benitz added: “With hydrocarbons continuing to account for around 75% of total energy usage in the UK, we believe that homegrown energy should always be prioritised over imports and we are encouraged that there are early indications following the recent cabinet changes of potential support for our domestic industry.
“This support will only work through delivery of the fiscal and regulatory reforms required to unlock long-term investment, protect jobs, strengthen energy security and support the energy transition.”