Petrofac has signed an extension to its integrated services contract with NEO Energy worth £250 million.
The deal will see Petrofac continue its maintenance, engineering and construction work on NEO Energy’s UK-based floating production storage offtake (FPSO) vessel, Global Producer III.
This is in addition to well management and well operator support for 25 wells across four fields in the Central UK North Sea which Petrofac provides. This was extended for five years in 2022.
The vessel, under current estimations, is set to continue production until “at least 2026,” Petrofac says, then it is due for its next reclassification by DNV.
However, Petrfac and NEO Energy are working to prolong the life of the field beyond 2026.
Nick Shorten, chief operating officer for Petrofac’s Asset Solutions business, said: “Our partnership with NEO Energy has seen us collectively overhaul production efficiency, maintenance execution and safe operations.
“Our proven approach to late-life asset transformation, including a robust programme of continuous improvement and deployment of digital tools, has again played out to significantly extend asset life.”
Petrofac has carried out operations, maintenance, engineering and construction under an integrated delivery model with NEO Energy since 2020.
NEO Energy takes on 50% stake in Buchan
This comes as NEO Energy announced its Great Buchan Area farm-out deal with Jersey Oil and Gas.
Both firms now hold a 50% interest in the licences that comprise the development, with NEO set to become the operator.
A $170 million deal to farm-in to the assets in the Moray Firth was agreed upon by NEO, the fifth-largest producer in the UK North Sea, earlier this year.
© JOGJersey sold a 50% working interest in Buchan in return for up to US$33.9m in cash payments, plus US$12.5m carry to take the development through to sanction and a 12.5% carry of the Buchan development costs capped at the approved Field Development Plan cost.
With the first phase, development costs are likely to be up to US$1bn to first oil, which makes a farm out valuation worth up to $170m.
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