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Extending the life of Clipper South

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Ineos Oil and Gas UK has completed a project to re-route gas production from its Clipper South field in the Southern North Sea via the Shell-operated Clipper field into the Bacton processing terminal. The $80mn investment in a new pipeline and subsea equipment will extend the life of the Clipper South field, following closure in October 2018 of the existing facilities at the Theddlethorpe gas terminal, previously operated by ConocoPhillips.

Meanwhile, it has been reported that Ineos AG is in exclusive talks to acquire ConocoPhillips’ remaining UK upstream assets. Commenting on the news, Daniel Rogers, Upstream Oil & Gas Analyst at GlobalData, says: ‘The acquisition in question would boost Ineos AG’s 2019 production from approximately 32,000 boe/d to over 95,000 boe/d and increase the company’s remaining UK reserves to 420mn boe, making Ineos the fifth largest producer in the UK, just behind Chrysaor Holdings that acquired a group of Shell’s UK assets in 2017. The sale of its UK assets would mean a total company production loss of 6%, or over 75,000 boe/d, for ConocoPhillips. The deal will provide Ineos AG with oil producing assets to shift its heavily gas weighted portfolio – currently 20% oil – to a 30% oil weightage.’

ConocoPhillips’ full UK upstream portfolio includes stakes in 30 currently producing fields, 26 of them gas fields and four oil-producing fields. The majority of any deal value is from ConocoPhillips’ remaining share in the Clair field and two other producing fields – Britannia and Brodgar.

‘The deal may also include eight discovered fields that are awaiting development,’ notes Rogers. ‘ConocoPhillips’ UK assets (post Clair field farm-down to 7.5%) are estimated to increase the net present value (NPV) of Ineos’s upstream portfolio by around $2.4bn, giving a NPV of roughly $4bn of both combined assets.’

Photo:
Clipper South platform
Source: Ineos

News Item details


Journal title: Petroleum Review

Countries: UK -

Subjects: Gas markets, Exploration and production, Subsea, Gas, LNG Terminals

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