Austrian oil, gas and power firm OMV has said it is to spend “billions” in the North Sea as it looks to balance and grow its production portfolio.
While short-term production is expected to drop to a trickle of 1,000 barrels of oil equivalent per day (boepd) in the North Sea (from 15,000 in 2005), the firm is eyeing 80,000-100,000 boepd by 2020.
Next year’s slump will be driven by BP’s Schiehallion development (5.9% owned by OMV) ceasing production as part of work to bring in a n ew floating production vessel on the field.
A string of divestments of small positions in fields in the basin – OMV cleaning up its portfolio – has also brought down OMV’s North Sea numbers.
However, that will change from 2015, with Schiehallion due back online, and from 2016 a string of three acquisitions by OMV in the last 12 months will also start to pay off.
The firm bought 20% in the Edvard Grieg development, due onstream in 2016, 15% in the Aasta Hansteen gas field, due in 2017, and 20% in the Zidane gas field, all off Norway.
Then OMV will start to see benefit from its 20% stake in Chevron’s West of Shetland Rosebank development and Cambo – a final investment decision on Rosebank is expected next year with the field potentially coming on in 2017.
A decision on Cambo is expected to be made following the upcoming Cambo-5 appraisal well.
Both fields are key to unlocking OMV’s own find, Tornado – a project likely to rely on the Rosebank/Cambo gas export infrastructure and on which OMV had its licence extended by two years recently in recognition by DECC of the challenges of developing such finds.
Gerhard Roiss, OMV chief executive and chairman, said: “This is where our investment is going in the next years, some billions. This is a focus area, we want to get out of all the small countries and positions we are in and focus on our core areas.”
The focus on West of Shetland was driven by the Arab Spring, said Roiss, a phenomena which spread wider and is likely to last longer than first expected, he said.
OMV’s upstream investment has already “stepped up” this year, at half of the firm’s overall £1.4billion in the first nine months, following the firm announcing last year it wanted to grow this side of the business, said chief finance officer David Davies.
Next year will see it looking at where it can drill in the Barents and off Norway, including the potential for operated wells.
OMV will also be assessing the 16 blocks in five licences it picked up in the latest UK offshore licensing round. Two of those licences it is operator on – a sign of the firm’s growing interest in operating its own assets.
Jaap Huijskes, executive board member for exploration and production said: “Towards the end of the decade we will see production ramp up.”