OKEA Decides Against Further North Sea Oil Project Development

OKEA Decides Against Further North Sea Oil Project Development
OKEA has decided not to develop the Vette discovery further due to the project’s insufficient financial robustness.

Norwegian oil company OKEA will propose not to develop the Vette discovery further to the license partners due to the project’s insufficient financial robustness.

OKEA, which is the operator of the Vette license offshore Norway, that the move would also affect the development of Grevling/Storskrymten discoveries.

To remind, the company bought Repsol’s 40 percent operated working interest in PL 972 which includes the Vette oil discovery in January 2021.

The discovery is located at a water depth of about 360 feet in the south-eastern part of the Norwegian section of the North Sea. OKEA claims that the estimated recoverable volumes were in the range of 30-50 mmboe. 

OKEA added that it was maturing the discovery towards a DG2 decision. OKEA has also worked to improve the economics of the Grevling/Storskrymten discoveries along with the license partners over the last few years.

Although significant reductions in break-even costs have been achieved, OKEA believes that it was insufficient to warrant a stand-alone field development.

As OKEA was targeting a joint serial development of the Vette discovery together with the Grevling/Storskrymten discoveries, the decision to halt that development also implies that OKEA is likely to halt further development of Grevling/Storskrymten.

“With the start-up of the Yme field in the second half of 2021 and energy prices at multi-year highs, OKEA has a strong cash balance which we aim to deploy where we can add the greatest value,” OKEA CEO Svein J. Liknes said.

“We see several attractive opportunities on the NCS with significant upside potential. Therefore, we believe there are other investments that will provide greater near-term value creation for OKEA and better returns to our shareholders.”

Partners in the Vette license – PL972 – are ONE-Dyas and M Vest Energy, each holding a 30 percent stake. OKEA holds the remaining 40 percent.

As for Grevling, OKEA is also the operator with a 35 stake. The other partners are Chrysaor with 35 percent and Petoro with 30 percent.

OKEA operates the Storskrymten discovery in PL974 with a 60 percent interest with the only license partner being Chrysaor with the remaining 40 percent.

To contact the author, email bojan.lepic@rigzone.com

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