Ithaca Energy (LON: ITH) has paused its efforts to electrify assets in the West of Shetland, Energy Voice understands.
The independent player wholly owns the Cambo oilfield and a stake in Equinor’s Rosebank (approved Wednesday), the two largest untapped finds in UK waters.
The firm is no longer participating in a West of Shetland Electrification team, which includes BP and Equinor staff in Aberdeen, two sources told Energy Voice on agreement of anonymity, including its contribution of resources.
Wider efforts to electrify assets in the West of Shetland continue.
London-listed Ithaca signed an agreement with BP and Equinor in December to work towards electrification of assets in the West of Shetland, including Cambo, Rosebank and BP’s Clair field.
It is understood the West of Shetland Electrification team continue to keep Cambo in mind as part of that – and the door is open for Ithaca to return to the scheme.
Ithaca Energy declined to comment.
It comes shortly after Ithaca became 100% owner of the Cambo oilfield after Shell exited the project, and it is currently on the hunt for partners.
A spokesperson for the West of Shetland Electrification group said it “continues to evaluate low-carbon power hub solutions to recommend a technically and commercially viable option to support decarbonisation West of Shetland”.
Electrification
Electrification is a process of powering offshore installations with electricity, rather than diesel or gas generators – which are the main pollutants offshore.
The Ithaca move comes amid a series of challenges for offshore electrification across the UK sector, like its technical complexity, the uncertain fiscal regime, and other prominent issues like securing grid connection.
Equinor confirmed Wednesday that 2030 is the “earliest” Rosebank would benefit from the emissions-busting tech, years after first oil is achieved.
On Cambo, prior to Shell selling its stake, Ithaca had indicated it would be willing to retain 50% and operatorship of the field.
David Moseley, vice president for North Sea research at Welligence said pausing electrification efforts would be logical for Ithaca.
“It seems likely that Ithaca will seek to dilute its position and as such, it is arguably logical to pause investment in the electrification scheme that is targeted at powering the project.
“Indeed, in much the same way, it is not expected to proceed with any major capex ticket items for the Cambo development until it has a partner onboard, with whom it can share risks and costs.
“Furthermore, with the political landscape bringing uncertainties in the approval process, pausing potentially significant spend and the commitment of resources on electrification is arguably, right now, a wise move as sole operator.”
He went on to add: “Options to presumably rejoin or benefit from the scheme later, when the development of Cambo is further progressed, means on paper at least Ithaca appears to lose little in the short term through temporarily opting out. Timing-wise, the Cambo development remains up in the air, and so the latest announcement does not materially impact what were already quite vague timescales.
“Electrification will likely play second fiddle to seeking a partner and receiving regulatory approval, arguably two of Cambo’s biggest hurdles to development.”
