Photo: OKEA

OKEA abandons North Sea oil project plans

Norwegian oil and gas company OKEA has decided to propose to the Vette licence partners not to develop the discovery further, due to the project’s insufficient financial robustness, believing that there are other investments that will provide greater near-term value creation.

Vette discovery - OKEA
Vette oil discovery map; Source: OKEA

OKEA is the operator of the Vette licence (PL972) with a 40 per cent working interest following the takeover of operatorship from Repsol earlier this year and has been maturing the discovery towards a DG2 decision. Its partners ONE-Dyas Norge and M Vest Energy each hold 30 per cent WI.

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The Vette discovery (Block 17/12) is located at a water depth of about 110 metres in the south-eastern part of the North Sea. The recoverable Vette volumes are estimated to be in the range of 30-50 mmboe.

OKEA stated on Tuesday it has also worked to improve the economics of the Grevling/Storskrymten discoveries along with the license partners over the last few years. Although significant reductions in break-even cost have been achieved, it is deemed insufficient to warrant a stand-alone field development, the company explained.

Grevling - OKEA
Grevling; Source: OKEA

As the company was targeting a joint serial development of the Vette discovery together with the Grevling/Storskrymten discoveries, the decision to halt further development of Vette also implies that the company is likely to halt further development of Grevling/Storskrymten.

OKEA CEO, Svein J. Liknes, stated: “With the start-up of the Yme field in the second half of 2021 and energy prices at multi-year highs, OKEA has a strong cash balance which we aim to deploy where we can add the greatest value. We see several attractive opportunities on the NCS with significant upside potential. Therefore, we believe there are other investments that will provide greater near-term value creation for OKEA and better returns to our shareholders.”

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OKEA is the operator of the Grevling discovery (PL038 D) with 35 per cent WI and other partners are Chrysaor Norge (35 per cent WI) and Petoro (30 per cent WI). OKEA is also the operator of the Storskrymten discovery (PL974) (60 per cent WI) with licence partner Chrysaor Norge (40 per cent WI).