Oil and gas company Neptune Energy said Tuesday it would spend more than $1 billion over the next five years "securing energy supplies for the UK and speeding the transition to net zero."
The amount planned for investment includes capex and pre-development, exploration, operational expenditures and abandonment expenditures.
According to Neptune, the company currently operates around 11% of the UK’s gas supply from fields in the UK’s Southern North Sea and the Norwegian North Sea.
Neptune said it would accelerate investment to increase energy supply to the UK, including doubling gas production from its Duva field in Norway to around 13 kboepd, which will supply enough gas to heat an additional 350,000 UK homes.
The company will start infill drilling at its operated Cygnus field in the UK next month, with the tenth well due onstream in October, and plans for an 11th well to be brought onstream next year, helping to maintain production from Cygnus and offset natural decline.
Further, the company will add around 50 kboepd of production for the UK from 2023, by bringing online new Seagull development, in which the company is investing around $1 billion with its partners.
Also, Neptune Energy is investing a further $120 million with its partners to drill an appraisal well in the second half of 2022 at the Isabella prospect in the Central North Sea.
"Should [Isabella] prove economic to develop, Neptune and its partners would invest a further $1 billion to bring the development onstream," Neptune said.
Furthermore, the company has confirmed its interest in the UK Government’s plans for a new licensing round, focused around Neptune’s existing assets and core areas in the UK North Sea.
Additionally, Neptune Energy said it was discussing with the North Sea Transition Authority (former OGA) an application for Pegasus West in the Southern North Sea, which would increase gas production via Cygnus.
Neptune Energy also said it was looking at opportunities and future investment in the electrification of Cygnus and in carbon capture storage and hydrogen projects in the North Sea, supporting delivery of the UK’s net-zero targets.
Pete Jones, CEO of Neptune Energy, said: “Securing lower carbon energy supplies is a national priority for the UK and Neptune has an important role to play. The Government’s Energy Security Strategy gives clarity on the key role of the North Sea in providing this security and its importance in the energy transition.
"While the UK represents just 10% of Neptune’s production, it is an important growth area for us, with investment options in the North Sea that will not only increase the UK’s energy security, but also support jobs and boost the supply chain.”
According to the company, in the last three years, Neptune has spent more than $500 million securing energy supplies for the UK – equivalent to $3 for every $1 Neptune has earned in the UK, and has spent more than $500 million developing new projects around its Gjøa hub in Norway, which exports gas to the UK via the St Fergus gas terminal.