Jersey Oil & Gas, a UK-focused oil and gas company working to develop the Greater Buchan Area ("GBA") in the UK North Sea, said Tuesday it had finalized the development solution for the project.
Jersey Oil & Gas, and NEO, soon to become the operator of the GBA licenses, plan to develop the Greater Buchan Area using a redeployed FPSO.
"This solution benefits from being both the lowest cost development option and the one that results in the lowest full-cycle carbon footprint of all the potential options evaluated. This is driven by the ability to re-use existing infrastructure that can be located directly at the Buchan field and, with limited modifications, make the FPSO "electrification-ready" upon its redeployment," Jersey Oil & Gas said.
The vessel will be able to be connected to one of the anticipated floating wind power developments that are intended to be located in close proximity to the GBA following the recent Innovation and Targeted Oil & Gas ("INTOG") license awards made by Crown Estate Scotland.
"The preferred development solution aligns with the NSTA's obligations to maximize the economic recovery of reserves and assist with achieving the UK government's net zero target. The NSTA has issued a letter confirming it has no objections to the Concept Select Report submitted to support the Buchan re-development program," Jersey Oil & Gas said.
The development plan for the GBA project is expected to be submitted in 2024.
Jersey Oil & Gas estimates that the total capital expenditure for the Buchan field re-development, including the cost of acquiring the FPSO, will be in the region of $900 million (gross cost).
This estimate will be assessed and refined with NEO as part of completing the Front End Engineering and Design and contract tendering activities that precede Field Development Plan ("FDP") finalization, Jersey Oil & Gas said.
Following the recently completed farm-out transaction with NEO, Jersey Oil & Gas has a 50% working interest in the GBA licenses.
Through the expenditure carry arrangements agreed with NEO, JOG will be carried for 12.5% of the Buchan field re-development costs (equivalent to a 1.25 carry ratio). JOG is also looking to farm out a further interest in the GBA licenses, with plans for Jersey Oil & Gas to ultimately retain a fully carried 20-25% interest in the Buchan re-development.
Separately on Tuesday, JOG said that the North Sea Transition Authority has approved an extension to the Second Term of the P2170 "Verbier" license. The Second Term of the P2170 licence has been extended by three years to August 29, 2026.
The extension was requested in order to provide the licensees with the time required to prepare a Field Development Plan for the Verbier discovery, as part of a phased Greater Buchan Area ("GBA") development plan. The first phase of the planned GBA work program involves the re-development of the Buchan field, with the start-up of production targeted for 2026.