Wireline Issue 47 Spring 2020

In a deal announced in late July, CalEnergy agreed to farm into 50%of IOG’s core project, committing to £40 million up front on completion and two development carries of £60 million and £65 million on Phase 1 and 2, respectively. The deal also includes an Area of Mutual Interest (AMI) agreement, whereby the two companies will work together 50:50 on any future developments around the Thames pipeline infrastructure, as well as options on future development opportunities and Licensing Rounds. The agreement also left operatorship with IOG, offering another distinct advantage, and in Hockey’s view “a real testament to the team that is in place here.” The rest of the project funding was raised via a €100 million bond issued on the Nordic bond market in September last year. The partners then approved a final investment decision in late October, signing off work schedules for 2020 at the same time and setting the project towards first gas targeted in July 2021. In addition to securing external partners, Hockey says IOG has put a lot of effort into strengthening its management team and board over the last twelve months, picking experienced board members from engineering, finance, subsurface and commercial backgrounds. It has also recruited several management team members with proven backgrounds in SNS gas development, all of which has helped add credibility to its plans. “Transformational is a bit cliched, but it was transformational because we turned the whole thing around and IOG is a completely different company now in terms of capital structure, shareholder base, the team – it’s all completely different from what it was even just a year ago.” Preparing a pipeline Work is now underway to prepare the facilities and infrastructure to support the two phases of development across the core portfolio. As of January, Hockey says the team are working with contractors under effective heads of terms for the design of two platforms — one each at Southwark and Blythe — with EPC and construction slated to begin early in the year, pending FDP approval. As with other recent SNS projects, these will be normally unmanned installations (NUI), with minimal production and processing facilities. Tiebacks include a 7km link from the Southwark platform to the Thames Pipeline, planned to be laid this summer, and a 24km line from Blythe to Thames laid in the autumn. A subsea wellhead at Elgood will also be tied back to the Blythe platform via another 10km line. Further tiebacks between the Thames infrastructure and the Nailsworth, Elland and Goddard fields will then be laid in phase two. IOG will also be building an internal drilling team to manage its 12-well campaign, with five wells planned for phase one and seven in phase two.

w ire lin e | S p r in g 2 02 0 | 2 9