UK-based petrochemical group INEOS announced Tuesday a farm-in agreement with Siccar Point Energy purchasing majority stakes at two exploration licenses in the Northern Gas Fields West of Shetland cluster, Kallanish Energy reports.
The undisclosed transaction, which is still subject to regulatory approval, is the second North Sea deal announced yesterday and follows INEOS’ purchase of DONG E&P assets earlier this year. It gives INEOS a “significant opportunity” to unlock gas from the most northerly licensed area of the UK Continental shelf, 150 kilometers north of the Shetland Islands.
“INEOS intends to become a significant player in this area. This deal confirms our aim to take a leading role to develop the Northern Gas Fields using the significant infrastructure investments already made West of Shetland,” said Geir Tuft, INEOS Oil & Gas CEO.
The Northern Gas fields West of Shetland includes the Lyon prospect, which is estimated to hold extensive gas reserves of between 3 and 5 trillion cubic feet (Tcf) of gas in place, according to initial survey work.
“As license operator, we’re excited to be moving forward in conjunction with INEOS to drill the Lyon prospect,” said Siccar Point Energy’s CEO Jonathan Roger. “This represents an opportunity to unlock the material gas potential of the most northerly licensed area of the UKCS. We look forward to working with INEOS in this new exploration partnership and to operating our first exploration well.”
Roger didn’t provide an estimated timeframe for the development of the licenses which, after the transaction is cleared, will be 33.33% owned by Siccar and 66.66% by INEOS.
While bringing U.S. shale gas to Europe and in the future to China, INEOS has vowed to become a leading player in British waters. It’s also planning onshore upstream oil and gas exploration in England as a way to renew its source of feedstock and guarantee energy security.