A recent spate of acquisitions shows oil companies and investors still see potential in the North Sea, a lawyer said yesterday.
Brian Hemming, partner at Burness Paull, said activity appeared to be “hotting up” in the region following a slow couple of years for oil field sales.
Late last month, Chrysaor announced its £3billion acquisition of a package from Shell, while EnQuest said it had purchased a 25% of BP’s Magnus field a week earlier.
Yesterday, Israel’s Delek Group said it would buy the remaining 80% of Ithaca Energy, a North Sea oil producer listed in London and Toronto.
Mr Hemming said: “With the UKCS having endured a torrid few years addressing the cost cutting required for the region to remain competitive in a low oil price environment, these three deals are positive signs that both oil companies and investors alike recognise the continue potential that the UKCS has to offer.
“It has taken longer than anticipated for the deal flow to take off, but we foresee more to follow during 2017.”
Delek’s deal for Ithaca also highlights the Israeli conglomerate’s thirst for international energy assets, according to Mr Hemming.
He said: “Although it already holds 19.7% of Ithaca and bought a 13.18 percent stake in Faroe Petroleum at the end of last year, Israel’s Delek Group is a relative newcomer to the North Sea.
“Its primary focus has been on developing the Eastern Mediterranean’s Levant Basin, but its bid for Ithaca shows its desire to expand its international energy operations, with Ithaca − with its North Sea focussed portfolio − being identified as an attractive target.”
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