Ithaca Energy has agreed to acquire the remaining 30% stake in Cambo from Shell, taking Ithaca Energy’s stake in Cambo to 100%.
To remind, Ithaca Energy said in May it had agreed to market Shell's 30% stake in the Cambo oil prospect in the UK North Sea, with a potential for Ithaca to increase its ownership.
On Tuesday, it said it would take over Shell's 30%.
"The acquisition, which has minimal near-term cost exposure, will provide Ithaca Energy with full control over the progression of the future development of Cambo, the second largest undeveloped oil and gas discovery in the UK North Sea," Ithaca Energy said.
The consideration, in accordance with the previously announced terms dated 5 May, is payable on the earlier of (i) first oil; and (ii) the receipt of proceeds of any subsequent sale of a working interest in Cambo by Ithaca Energy; and is subject to Ithaca Energy proceeding with FID and/or the NSTA providing development consent.
Back in May, it was reported that should Ithaca decide to take over Shell's stake, it would pay $1.50 per barrel of oil equivalent (boe) of so-called P50 resources in Cambo, which stood at 173 million boe as per the latest development plan.
Alan Bruce, Chief Executive Officer of Ithaca Energy, said Tuesday: “We are pleased to conclude the marketing process with Shell and to take full ownership of the Cambo development. Our primary focus continues to be the delivery of our BUY, BUILD and BOOST strategy, including the future development of Cambo, subject to fiscal conditions. We believe that Cambo has an important role to play in providing energy security and economic benefit to the UK, while reducing overall emissions intensity.”
According to Ithaca Energy, the Cambo field is the second largest undeveloped oil and gas discovery in the UK North Sea, located in the West of Shetland region.
"The development provides Ithaca Energy with long term production growth at a low expected unit operating cost per barrel. With its modern, energy-efficient design and potential for electrification, Cambo could be one of the lowest-emission intensity assets in the North Sea," Ithaca Energy said.
According to Ithaca Energy, the field is expected to produce at less than half the CO2 intensity than the average UK field, enabled by the FPSO design which includes features such as being fully electrification ready (subject to grid connection availability), zero routine flaring and the Sevan FPSO hull design reducing power demand.
Back in December 2021, while the partners in the field were Shell and Siccar Point Energy, Shell said it had ditched plans to develop the Cambo oil field, which became a lightning rod for climate activists seeking to halt the development of new oil and gas resources.