Junior explorer Faroe Petroleum announced Friday that it was relinquishing its West of Shetland P1161 license. The company – which focuses on oil and gas prospects in the Atlantic Margin, North Sea and Norway – said that results of work on the Fulla prospect within the license area confirmed oil of relatively poor quality and a smaller-than-expected resource size.
After having drilled exploration well 206/5a-3 in the Fulla prospect, targeting the Clair and Whiting reservoir sands, extensive modeling was undertaken to establish the resource potential and assess a means of economically developing the Fulla discovery in conjunction with the 1980 Freya discovery. But Faroe said that no economically viable solution has been found to bring these discoveries to development and so it will relinquish the license.
Faroe Chief Executive Graham Stewart commented in a company statement:
"Faroe Petroleum adheres to a strict policy of protecting shareholder interests such that substantial development investments are only made where there is good potential for an attractive return, and unfortunately the P1161 licence does not satisfy our economic criteria.
"The high potential West of Shetlands area continues to be a core element of Faroe Petroleum's strategy. The company has considerable knowledge and experience in this important region, holding a large portfolio position there, including the Glenlivet and Tornado gas discoveries, which are progressing towards development."
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