Following the news (Friday 30 November) of Royal Dutch Shell subsidiary A/S Norske Shell completing a deal to exit its operated interest (44.56%) in the Draugen oil field and its non-operated interest (12%) in the Gjøa gas field, offshore Norway, further signifies portfolio rebalancing and divestment in the region by major oil and gas companies,
Daniel Rogers, Upstream Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his insight on the recent trend affecting the UK and Norway:
“Completed and announced deals by established oil and gas companies in the North and Norwegian Seas signifies the change that the region is currently experiencing. Recent trends show European legacy exploration and production companies (E&Ps) are rebalancing portfolios in the North and Norwegian Seas, with asset sales of more mature fields but also asset acquisitions and investment in upcoming projects. On the other hand, we see that legacy North American E&Ps are indicating a clearer divestment strategy away from the region.
“As the more established North and Norwegian Sea players rebalance and optimise portfolios, opportunities are presented for developing E&Ps looking to invest in sustaining field production and maximising economic recovery to generate cash flow. These often smaller, developing companies are nimble enough to allocate the right experience and resources to prolong field life and maximize asset value.
“Some instances of asset handovers include EnQuest's intervention at the Heather field (North Sea). The company brought a fresh perspective as the platform faced decommissioning and following facilities upgrades, workovers and well re-drilling, production levels were doubled from the field. More recently, Chrysaor Holdings acquired a stake in the Maria field (North Sea) and conducted a 2018 drilling campaign with an anticipated fivefold increase in oil production from the field by 2020, expecting to bring an additional 10 years of field life.”