Neptune Energy to splash out over £800m to support UK energy security

Neptune Energy has announced today it will spend more than $1 billion (£810 million) to help shore up the UK’s energy supplies.

Due to be dished out over the next five years, the cash will also help to accelerate the transition to a net zero economy.

Neptune currently operates around 11% of the UK’s gas supply from fields in the UK’s southern North Sea and the Norwegian North Sea.

It is also among the UK’s lowest carbon producers, with a carbon intensity of 1.7 kilograms of CO2 per barrel oil equivalent (boe).

That compares to an industry average of 20 kg CO2/boe.

Westminster recently published its energy strategy, detailing how it plans to scale up North Sea production alongside the deployment of renewables, like hydrogen and nuclear.

In response Neptune has set out its ambition to support energy security in the short-term by doubling gas production from its Duva field in Norway and kicking off infill drilling at the Cygnus field.

And the company says it could supply even more energy if the UK’s Gas Safety Management Regulations are more closely aligned with European standards.

Neptune will also invest around £800m, alongside its partners, in the new Seagull development, adding around 50 kboepd of production for the UK from 2023.

Existing infrastructure will be used in order to bring production forward quickly and efficiently.

A further £97m will be spent by Neptune and its partners in the second half of the year on an appraisal well at the Isabella prospect in the central North Sea.

Should it prove economic to develop, that will trigger another £800m investment to bring the development onstream.

In the longer term, Neptune plans to spending around £243m in the next three years developing the Gjoa hub in Norway, which exports gas to the UK via St Fergus terminal.

It has also signalled interest in the UK Government’s plans for a new licensing round, and is in discussions with the North Sea Transition Authority around securing an application for Pegasus West in the southern North Sea.

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Pete Jones, chief executive of Neptune Energy, said: “Securing lower carbon energy supplies is a national priority for the UK and Neptune has an important role to play.

“The Government’s Energy Security Strategy gives clarity on the key role of the North Sea in providing this security and its importance in the energy transition.

“While the UK represents just 10% of Neptune’s production, it is an important growth area for us, with investment options in the North Sea that will not only increase the UK’s energy security, but also support jobs and boost the supply chain.”

In the last three years, Neptune has invested more than £400m securing energy supplies for the UK.

A further £400m has been spent developing new projects around its Gjoa hub in Norway, and since 2018, it has contributed more than £1.5bn to UK GDP, supporting an average of 3,270 jobs each year.