LONDON – EnQuest has agreed to acquire from Equinor a 40.81% interest in the undeveloped Bressay heavy oil field in the UK northern North Sea.
Subject to approvals, EnQuest will also assume operatorship of the surrounding licenses after Equinor has P&A’d the 3/28-1 well.
Initial consideration is £2.2 million ($2.9 million) payable as a carry against 50% of Equinor’s net share of costs from the point that EnQuest takes over as operatorship. In addition, EnQuest will make a contingent payment of $15 million after Britain’s Oil and Gas Authority has approved a development plan for the field.
The transaction would bring the company up to 115 MMbbl (net) 2C resources, depending on the selected development concept.
Possible scenarios include a tieback to the EnQuest-operated Kraken field FPSO, with Bressay’s produced gas potentially used for fuel for the vessel, reducing carbon emissions over the longer term.
The company would also enter a strategic partnership with Equinor, with a view to jointly leveraging their UK offshore development capabilities.
Bressay, discovered in 1976 and formerly operated by Chevron, is 12 km (7.5 mi) northeast of the Kraken field in 110 m (361 ft) water depth. Since 1976, it has been appraised via drilling and testing of four further wells, with flow rates of up to 2,900 b/d.
The field extends across UK license blocks: current partners are Equinor (81.62%) and Chrysaor (18.38%).
Estimated stock-tank oil initially in place is 600-1,050 MMbbl, making this one of the UK’s largest unproduced offshore resources but also long considered one of the most complex to develop. Equinor deferred concept selection in 2016 due to tough market conditions at the time and the need to simplify the development concept.
Arne Gürtner, Equinor’s svp for UK & Ireland offshore, said: “We welcome EnQuest as the new operator of Bressay and believe the knowledge and experience both parties can share from our existing Mariner and Kraken developments will further strengthen the project.”
Assuming the deal completes later this year, EnQuest will have a 40.8125% operated interest; Equinor 40.8125%; and Chrysaor 18.375%.