Struggling North Sea operator Noreco has revealed it could face a £56million bill as its Danish operations remain shut down.
The company’s three fields in the Danish North Sea – Nini, Nini East and Cecilie – have not been in production since the summer due to problems on the Siri platform.
Noreco – which saw its entire output wiped out earlier this year after a series of production problems – faces not seeing the fields start up until after Winter, which would leave the company and its partner facing heavy charges.
“The Siri field operator DONG continues its dialogue with Danish authorities about a temporary by-pass solution for Noreco’s fields,” Noreco said in a statement.
“While they are still targeting an earliest possible start-up there is a risk that production may not resume until after the winter season.
“The licence partners have concluded that security for abandonment costs should be established for the Nini, Nini East and Cecilie fields by 1 January 2014.
“Noreco’s part of these costs is estimated at approximately DKK 500million (£56.4million). Discussions are on-going about form, initial amount and build-up of such guarantees.”
The company revealed half-year losses of more than 500million krone earlier this year due to production problems.
The company is hoping for a boost from its share of the Huntington field, which has been struggling with output due to problems with a gas export pipeline in the North Sea.
The field, which had been working at around 30,000boed, is currently being forced to operate at 40% capacity while issues with the central area transmission system (CATS) are resolved.
“Indications from the Huntington and CATS operators are that the CATS restrictions will be eased through the course of the first half of October.”