Wireline Issue 45 - Summer 2019

Alongside peers like Chrysaor, Hurricane Energy, and Siccar Point, these PE-backed companies are steadily reshaping the UKCS market. What is clear is the extent to which they are laser-targeted on growth and the development of profitable businesses that are sustainable for the long term. Far from quick cash- generating schemes or financial engineering exercises, they are entirely preoccupied with the survival and prosperity of their businesses – and of the North Sea – well beyond five – and even ten-year horizons. In doing so, the challengers are fast becoming part of the establishment. Their support and investment will therefore be critical to delivering MER and in achieving the ambitions set out in Vision 2035. “If you look at what we’ve been about, it’s purely been about good solid subsurface work and sensible commercial strategy,” Rowe affirms. “And if you do those things, you’re basically just a regular oil company but using a different source of equity to deliver growth. That’s all we’re trying to do.”

“I think it’s safe to say that it’s made a considerable difference in the North Sea, and still does.” Leaner business models, combined with a willingness to commit capital to both greenfield projects and reappraisal activity, will be crucial in driving the future of the North Sea. For Alan, it will also mean the basin is increasingly managed by smaller UK-based companies, rather than within larger international portfolios: “There is going to be a lot more local investment – the money might be coming from overseas but it’s local players who are at the heart of the investment.” Companies like Zennor also show that PE will benefit long-term infrastructural planning too. Investment in operations at ETAP by operator BP have already extended life to 2035 and beyond, and will continue to enable future development activity. “This tying back of additional resources, appraisal of discoveries to tie back, this is what is going to keep certain parts of the central North Sea going,” Martin adds.

Image left: A field development

illustration for Zennor Petroleum's Finlaggan project.

Image right: Rendering of the Finlaggan subsea well infrastructure.

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