Decommissioning Insight 2019

DECOMMISSIONING INSIGHT 2019

On a regional basis, decommissioning spend is split fairly evenly between the CNS, NNS and SNS/IS in the immediate future. However, by the end of the decade, decommissioning in the CNS is rising to make up more than 50 per cent of total activity as expenditure in the NNS begins to decline. Activity in the west of Shetland and east Irish Sea is also seen to grow towards the end of the decade. The step change in regional forecast expenditure in comparison with previous years may be in part due to the amount of M&A activity which has recently taken place. Figure 8 details the M&A activity in the past two years where operatorship of an asset has changed. This shows that the majority of the assets which have been acquired are situated in the CNS, inferring that new owners plan to inject a new lease of life into these assets and ensure that dates for CoP are pushed to the right.

Figure 8: UKCS M&A Activity 2018 and 2019

Merger & Acquisition Activity

Petrogas NEO picked up a number of assets from Total E&P for around $635 million. The deal secured many fields in the CNS region such as Dumbarton, Balloch, Lochranza, Drumtochy and Flyndrew. Chrysaor acquired the majority of ConocoPhilips’ UK portfolio in a deal reported to be worth almost $2.7 billion. The deal included assets in the CNS and Irish Sea such as Britannia, Brodgar, Calder, Callanish, Enochdhu, Jade, Jasmine, Joanne, Judy and Millom. Marathon Oil divested its UK portfolio to Rockrose Energy for $95 million. The deal included the Brae fields in the central North Sea. Delek Group (parent company of Ithaca Energy) purchased Chevron’s UK assets in a $2 billion deal. This deal included the Alba, Alder, Captain and Erskine assets in the Central North Sea. Enquest fully acquired the Magnus field in the northern North Sea by purchasing the remaining interest in the field from BP. Serica Energy acquired an increased stake in the northern North Sea assets, Keith and Rhum from Total, Marubeni and BHP Biliton and closed out the deal to buy BP’s share for the Rhum field. Tailwind Energy acquired the Triton cluster of assets from Shell and ExxonMobil. This included the Bittern, Guillemot, Clapham, Pict and Saxon fields in the central North Sea.

20