Aker BP swaps licenses with PGNiG to enable Skarv tie-back

Norwegian oil and gas company Aker BP has strengthened its position in the Skarv offshore area by swapping its interest in two licenses for an interest and operatorship in license which holds the Shrek discovery, near the Skarv field.

Skarv FPSO; Source: Aker BP

Aker BP said on Tuesday it had entered into an agreement with PGNiG Upstream Norway to swap its 3.3 percent interest in the non-operated Gina Krog field and an 11.9175 percent interest in license 127C, in exchange for a 5 percent interest and operatorship in license 838 and a cash consideration.

License 838 contains the recent Shrek discovery near the Aker BP-operated Skarv field.

The transaction and the transfer of operatorship to Aker BP will enable an efficient development of this discovery as a tie-back to the Skarv FPSO, Aker BP explained. The license also holds further exploration potential.

License 127C contains the Alve Nord discovery and the Alve NE prospect, which is also located in the Skarv area. Aker BP plans to drill an exploration well in the license in 2020.

The transaction will provide Aker BP with a total cash consideration of up to $62 million, consisting of a firm payment of $51 million upon closing and an additional payment of $11 million contingent on a development of the Alve Nord discovery.

After this transaction, Aker BP will hold 35 percent interest in license 838 and 88.0825 percent interest in license 127C, while it will have fully divested its interest in the Gina Krog field. The effective date for the transaction is January 1, 2020.

In a separate statement on Tuesday, PGNiG said that, through the deal with Aker BP, it had positioned itself to send greater volumes of gas to Poland after the start-up of the Baltic Pipe.

“The transaction is a perfect fit for the PGNiG Group’s strategy. Firstly, it contributes to the diversification of gas supplies to our portfolio and strengthens Poland’s energy security due to the build up of our own hydrocarbon resources. Secondly, increasing our working interest in the producing Gina Krog field will result in immediate growth of the company’s production on the Norwegian Continental Shelf and PGNiG’s EBITDA,” said Jerzy Kwieciński, President of the Management Board of PGNiG, the sole owner of PGNiG Upstream Norway

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