BP’s move to double its stake in the £3billion Culzean gas development will be followed by other UK North Sea deals to put asset ownership “in the right place”, an oil and gas expert said last night.
Martin Findlay, senior partner in the Aberdeen office of KPMG, was speaking after BP announced it was buying a 16% interest in Culzean from Japan’s JX Nippon.
It takes the UK oil and gas giant’s stake in the field to 32%, while JX Nippon still owns 18.01%. The other partner, with a 49.99% stake, is operator Maersk Oil.
Financial terms of the deal between BP, which is in the middle of a five-year, £7billion investment programme in the North Sea, and JX Nippon were not disclosed.
North Sea firms with cash to invest are currently scouring the market for bargains.
Shell is among the bigger players potentially looking to offload assets which are expected to change hands for much less than they were worth a few years ago.
Mr Findlay said: “BP’s investment is one of several UKCS (UK continental shelf) transactions that will happen over the coming months and years in order to ensure economic field interests are owned in the right place and by those with the ability and skill-set to maximise field development.
“There are several other UK oil and gas field interests where change of ownership transactions are needed.
“This will be to align ownership interests with the availability of development capital and to align with corporate business plans.”
But he added: “Striking those deals at a price which meets buyer and seller expectations will be a challenge in some cases.”
Culzean, discovered in 2008, contains gas condensate estimated at 250-300million barrels of oil equivalent (boe).
Development was sanctioned at the end of August last year and the field is expected to produce enough gas to meet 5% of total UK demand at peak output in 2020/21.
Production is expected to start in 2019 and continue into the 2030s, with a plateau of 60,000-90,000boe per day.
Mark Thomas, BP’s regional president for the North Sea, said: “We are pleased to have deepened our interest in Culzean and we look forward to helping Maersk make this important central North Sea development a success.
“This is a challenging time for the industry and we must continue to work together to ensure that when developments like Culzean, or other projects such as BP’s Quad204 and Clair Ridge, come online they can be run as efficiently as possible.
“BP has been focusing and refreshing its North Sea portfolio by bringing new fields into production, redeveloping and renewing existing producing facilities and divesting some of its more mature or less strategic assets.
“Our deepening in Culzean further demonstrates our commitment to supporting the development of another UK field for the future.”
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