Oil & Gas UK: Ithaca-Chevron deal signal of confidence in oil & gas industry

Oil & Gas UK, a trade association for the UK offshore oil and gas industry, has welcomed the news that Israeli firm Delek Group has acquired Chevron’s North Sea assets in a $2 billion deal, saying that this is a further signal of confidence in the industry. 

The sale will see 10 additional fields added to the firm’s UK portfolio. It was agreed last week through Delek’s wholly-owned subsidiary Ithaca Energy.

The deal adds around 235 million boe in proven and probable reserves to Ithaca and adds more than 60,000 barrels of oil equivalent per day (boepd) to Ithaca’s existing production.

Commenting on the news, Mike Tholen, Oil & Gas UK’s Upstream Policy Director, said: “This $2 billion transaction is a further signal of confidence in the industry – and highlights how the hard work to improve the attractiveness of the UK Continental Shelf is enabling a diverse range of investors to play into the basin, reinvigorating activity.

“Chevron is one of the pioneering companies which began exploration on the UKCS more than 50 years ago and the company has gone on to make a vital contribution to the success of the UK North Sea. That being said, the sale, and indeed purchase of assets, is a natural part of the commercial life of the UKCS and presents new opportunities to maximise recovery.

“As our Business Outlook report showed, £200 billion will be needed to be spent to find, develop and operate the reserves of the future and the UKCS is now in a much more competitive position to achieve this. Delek Group’s acquisition demonstrates the potential for growth in the basin – key to achieving Vision 2035.”

Wood Mackenzie, an energy intelligence group, last week said that the Ithaca-Chevron deal continued the UK trend of smaller companies taking on assets from the majors, which resulted in assets worth over $5 billion change hands in the last few months.

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