Development of the Huntington oil discovery will go ahead as planned despite its operator, Oilexco North Sea (ONS), going into administration this week.
This is according to one of the partners in the find, Norwegian oil and gas company Noreco.
Huntington is rated by analysts as potentially one of the biggest finds in the UK North Sea for five years with up to 150million barrels of oil in place.
Noreco said yesterday that it still planned for first oil from Huntington to be produced in 2010, and that the field partners were working towards this.
Operator ONS, a subsidiary of Canadian company Oilexco, went into administration on Wednesday after its lenders refused to provide it with additional funding.
Administrators at Ernst and Young (E&Y) have already reported they will continue trading with a view to seeking buyers for some or all of ONS’s assets.
Noreco said the Huntington project was going ahead as planned, and then it would have to see if it got a new partner.
The Norwegian company said that, for administrators wanting to preserve value, it was important work continued towards development of the field.
Noreco owns 20% of the Huntington discovery in block 22/14b in the central North Sea. ONS has a 40% stake, and the other partners are Germany’s E.ON Ruhrgas with 25% and Carrizo Oil and Gas with 15%.
Exploration wells last year on adjoining block 22/14a showed that Huntington extended into that block.
That means a deal needs to be struck with that block’s partners before a field-development plan for Huntington can be filed.
Noreco said it expected that field-development proposals would be filed in the first quarter of this year.
Meanwhile, Norwegian “round rig” builder Sevan Marine said it was still preparing its floating production vessel Sevan Voyageur for work on ONS’s 100%-owned central North Sea Shelley oil field.
Sevan said it had held initial discussions with the administrators, and a process for payment for activities incurred during the period of administration had been agreed.
The company is continuing final commissioning activities on the Sevan Voyageur, preparing the unit for first oil from Shelley.
E&Y said on Wednesday that ONS was producing about 16,000 barrels of oil per day and was on the verge of adding to this with production from Shelley.
Tullow Oil said yesterday its Mahogany-3 well in the West Cape Three Points licence offshore Ghana had encountered significant oil columns in both the Jubilee field appraisal objective and a deeper exploration target.
It said that more than 108 feet of oil pay was penetrated, with the well confirming a significant extension of the Jubilee field to the south-east. The secondary objective of the well was to drill Mahogany Deep, an exploration target identified on 3D seismic, where the well encountered almost 56ft of oil-bearing sandstones.
Tullow, which has a 22.9% interest in the West Cape Three Points licence, said the success opened up further potential in the region and was the subject of ongoing evaluation.