UK oil and gas independent secures crucial North Sea licence extension

UK-based upstream oil and gas independent, Jersey Oil & Gas has secured a key extension from the North Sea Transition Authority for the second term of the P2170 Verbier licence.

Jersey confirmed the extension on Tuesday in a regulatory update to the London Stock Exchange (LSE) and noted that the “second term of the P2170 licence has been extended by three years to 29 August 2026”.

“The extension was requested in order to provide the licensees with the time required to prepare a field development plan (FDP) for the Verbier discovery, as part of a phased Greater Buchan Area (GBA) development plan,” it stated.

The first phase of the planned GBA work programme involves the redevelopment of the Buchan field, with first production targeted for 2026, the company added.

The Verbier asset was “awarded as a traditional licence” in the UK’s 28th Licensing Round.

The block lies approximately 100 kilometres northeast of Aberdeen, close to the Buchan and Tweedsmuir North and South oilfields and straddles the western end of the North Buchan Trough.

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FPSO solution agreed

Field partners Jersey and Neo Energy, the UK company backed by Norwegian investor HitecVision, also announced on Tuesday that the GBA field project will be developed through the redeployment of a floating, production, storage and offloading vessel.

The FPSO route has been singled out after other development options were considered, including tie-back options to existing offshore platform infrastructure.

Jersey said the FPSO option was finally agreed on as it had the “lowest cost and lowest full-cycle carbon footprint”, owing to reuse of existing infrastructure that can be placed at Buchan.

Additionally, the developers are considering preparing the FPSO for electrification of energy supply, if the vessel could connect to the Intog-led floating wind power developments intended to provide clean energy to North Sea oil and gas installations.

The companies have agreed commercial terms for the “potential acquisition” of an existing FPSO that could be deployed at Buchan. The acquisition of the vessel would be part of the carry arrangements agreed between Jersey and Neo Energy.

Development costs for Buchan are estimated at some $900 million, the sum includes the expenditure related to the FPSO.

Engineering studies are now taking place, targeting a submission of the development plan next year.

Neo Energy took up a 50% operating stake in the Greater Buchan licences in April.