Photo: Draugen; Source: OKEA

OKEA enters Neptune’s license near Draugen field

Oil and gas company OKEA has signed a sales and purchase agreement (SPA) with Neptune Energy for the acquisition of a 30 per cent working interest in offshore license PL938 near the Draugen field.

OKEA said on Friday that the effective date for the transaction was 1 January 2020 and that Neptune would remain as operator of the license with 30 per cent working interest in the license.

PL938 is located less than 10 kilometres northwest of the OKEA-operated Draugen field and directly north of the Bauge and Hyme fields.

Location of PL938 license; Source: OKEA
Location of PL938 license; Source: OKEA

The licensees have committed to drill an exploration well on the Calypso prospect in the licence and the plan is to drill in late 2021 or 2022. As part of the agreement, OKEA will carry a portion of Neptune’s costs for the well.

Andrew McCann, SVP of subsurface and wells in OKEA, said: “Calypso is an attractive prospect close to Draugen with a potential of up to 37 million barrels of oil.

As the operator of Draugen, we are keen to find resources in the nearby area with the potential to be developed through our existing infrastructure and Calypso fits this exploration strategy well.

We look forward to working with the operator and other licensees to ensure an efficient exploration well and further activity in the license”.

The license was awarded in March 2018 as part of the APA 2017 licensing round. The other licensees, apart from Neptune, are Vår Energi and ConocoPhillips with 20 per cent each. It is worth noting that the transaction is subject to approval by the Ministry of Petroleum and Energy.

Erik Haugane, CEO of OKEA, added: “This transaction further diversifies OKEA’s exploration portfolio and strengthens our position in the Draugen area.

If a discovery is made in the licence, we will work to ensure an efficient development given our strategy and experience with low-cost field development of smaller discoveries.

Coming only two months since we acquired the Aurora discovery from Equinor, this transaction further demonstrates our focus on building our portfolio around our key production hubs”.

As for the Draugen field, it is located in the southern part of the Norwegian Sea. The water depth in the area is 250 metres. The field was discovered in 1984 and the plan for development and production was approved in 1988. Production started in 1993.

The field has been developed with a concrete fixed facility and integrated topside and has both platform and subsea wells. Stabilised oil is stored in tanks at the base of the facility. Two pipelines connect the facility to a floating loading-buoy.

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