U.K.-based oil and gas company Dana Petroleum has terminated the agreement with NEO Energy for the proposed sale of the Western Isles floating, production, storage and offloading (FPSO) vessel, which was planned for deployment in the North Sea as part of Buchan field redevelopment.
Jersey Oil & Gas, NEO Energy’s partner in the Buchan Horst joint venture, said the termination follows the agreement reaching longstop date at the end of February 2025.
The Buchan Horst joint venture's ability to recommit to the acquisition of the FPSO is naturally linked to the satisfactory conclusion of the on-going fiscal and regulatory consultations and completion of the required pre-handover works on the vessel, the company said.
To remind, NEO Energy agreed to buy Dana Petroleum's full equity in the Western Isles FPSO back in 2023.
The transaction was conditional on the final investment decision and regulatory approval of the Buchan redevelopment.
"The route to unlocking the Buchan development continues to depend on achieving satisfactory conclusions in respect of the on-going fiscal and regulatory consultations.
“The fiscal consultation was kicked off yesterday and encouragingly, while the details are yet to be fleshed out, it was apparent that the government has heard many of the concerns of the industry,” said Andrew Benitz, CEO of Jersey Oil & Gas.
Western Isles FPSO produced 36 million boe from two oil fields, Harris and Barra, located in the Northern North Sea.
The FPSO ceased production in May 2024.