Norwegian oil company OKEA, the operator of the Vette license offshore Norway said Tuesday it had decided to propose to the license partners not to develop the Vette discovery further, "due to the project’s insufficient financial robustness." The move will also affect the development of Grevling/Storskrymten discoveries.
OKEA acquired Repsol’s 40% operated working interest in PL 972, which includes the Vette oil discovery, in January 2021.
The Vette discovery (Block 17/12) is located at a water depth of about 110 meters in the south-eastern part of the Norwegian section of the North Sea. At the time of the acquisition, OKEA said it estimated estimates that the recoverable volumes were in the range of 30-50 mmboe.
"OKEA took over operatorship of the licence earlier this year and has been maturing the discovery towards a DG2 decision. OKEA has also worked to improve the economics of the Grevling/Storskrymten discoveries along with the license partners over the last few years. Although significant reductions in break-even cost have been achieved, it is deemed insufficient to warrant a stand-alone field development," the company said.
As OKEA was targeting a joint serial development of the Vette discovery together with the Grevling/Storskrymten discoveries, the decision to halt further development of Vette also implies that OKEA is likely to halt further development of Grevling/Storskrymten, OKEA said.
“With the start-up of the Yme field in the second half of 2021 and energy prices at multi-year highs, OKEA has a strong cash balance which we aim to deploy where we can add the greatest value. We see several attractive opportunities on the NCS with significant upside potential. Therefore, we believe there are other investments that will provide greater near-term value creation for OKEA and better returns to our shareholders,” says OKEA CEO Svein J. Liknes.
Partners in the Vette licence (PL972) are ONE-Dyas Norge AS and M Vest Energy AS, each holding a 30% stake. OKEA holds 40%.
OKEA is the operator of the Grevling discovery (PL038 D) with 35% WI. The other partners are Chrysaor Norge AS (35% WI) and Petoro AS (30% WI). OKEA is also the operator of the Storskrymten discovery (PL974) (60% WI) with licence partner Chrysaor Norge AS (40% WI).