Ithaca Energy to buy Cambo operator Siccar Point in $1.5 billion deal

Ithaca Energy has struck a deal to buy Siccar Point Energy, operator of the controversial Cambo project, for just shy of $1.5 billion.

The deal includes holdings in two of the largest untapped fields in UK waters: Siccar Point’s 70% operated stake in Cambo and its 20% non-operated holding in Rosebank.

Ithaca, which bought Chevron’s North Sea business in 2019, is continuing a run of acquisitions and will pay an upfront $1.1 billion, along with contingent payments totalling up to $360m. The deal is expected to close in the second quarter of the year.

The Siccar Point team and the assets will all transfer to Ithaca on closing, doubling the latter’s recoverable reserves, and will support production of 80,000 – 90,000 barrels of oil equivalent per day through the next decade.

Siccar Point also holds stakes in the BP Schiehallion (11.75%) and the Equinor Mariner (8.89%) fields, both in the top 10 producers in the UK.

© Supplied by Ithaca Energy

Cambo and Rosebank, both in the West of Shetland, are huge fields by UK standards, with the former being a key battleground for climate campaigners during COP26.

Shell recently confirmed it is retaining its 30% non-operated holding in the project, having said in December it wouldn’t progress it to an investment decision.

Ithaca said, with both Cambo and Rosebank due for a final investment decision next year, they represent a “near-term opportunity” to boost the local and wider economy through “significant” employment opportunities.

CEO Alan Bruce said: “This is a transformational deal for the Company which cements Ithaca’s position as a leading independent E&P operator in the North Sea. The acquisition doubles our recoverable resources and means that we now have interests in a significant portion of the largest UKCS fields. This includes interests in two of the UK’s most strategically important and near-term developments which will enable us to play an increasing role in securing domestic energy supply for the UK.

“We firmly believe that this transaction will deliver value for all of our stakeholders including the local community and wider UK economy. The development of the Cambo and Rosebank fields is a huge opportunity to not only help secure the UK’s energy future for at least another quarter of a century, but also to create thousands of direct and indirect jobs in the process.

“We are excited about the future for the enlarged Ithaca, the role we will play in the UKs energy supply, and look forward to welcoming our new colleagues from Siccar Point.”

The first phase of Cambo is expected to deliver 170 million barrels of oil equivalent, while Rosebank is a 300 million barrel project.

© Supplied by Siccar Point Energy

Siccar Point is backed by private equity firms Blackstone and Bluewater and said Ithaca is well placed to “pick up the baton”.

CEO Jonathan Roger said: “We are proud of what Siccar Point Energy has achieved as a result of the dedication of our team and support of our sponsors, Blackstone and Bluewater, and combining our business with Ithaca Energy is a natural step to take the portfolio through the next stage of organic growth. Ithaca is extremely well placed, given its material production base, to pick up the baton and unlock the significant growth opportunities in the Siccar Point portfolio.

“This will ensure the UK continues to deliver reliable UK oil and gas production for powering homes and businesses and manufacturing essential products and maintaining energy security during the planned energy transition. We look forward to working with the Ithaca Energy team to support the integration of the businesses.”

The deal is the latest in a run of acquisitions for Ithaca, which announced a $224m takeover of Summit Exploration and Production’s business in the North Sea last week.

Ithaca, owned by Israel’s Delek Energy, also recently acquired the UK business of Marubeni in November.

Despite enthusiasm for the deal from the North Sea energy sector, climate campaigners said it will “do nothing for soaring energy bills”.

Friends of the Earth Scotland’s Climate and Energy Campaigner, Caroline Rance said: “The UK Government must reject Cambo and all new fields, and both the UK and Scottish Governments must urgently focus on scaling up renewable energy, insulating homes and rapidly increasing the number of homes using green heat systems.”