Jersey Oil & Gas cautions over North Sea project timeline ahead of general election
Jersey Oil and Gas has cautioned that the UK general election could potentially slow the delivery of its Buchan gas field project.
The company, in a statement ahead of today’s AGM, told investors that activities continue for the Buchan project to be ready for Field Development Plan (FDP) approval by the end of this year.
But, JOG and its partners have assessed the implications of the upcoming UK General Election in July 2024 and their plan for progressing the project. And, they conclude that the exact timing for achieving its targeted timeline will be tied to securing fiscal clarity from the next government.
“With a UK General Election now announced, we are hopeful that fiscal clarity will be forthcoming in short order so that the industry can continue to do what it does best, namely investing in major capital projects that deliver vital low carbon homegrown energy and highly skilled jobs,” JOG chief executive Andrew Benitz said.
“In the case of the Buchan field, we have a project that will deliver a meaningful contribution to the energy transition process through our electrification strategy, which helps facilitate investment in cutting-edge floating offshore wind.”
NEO Energy, Buchan’s operator, is making good progress on the work programme required to enable project sanction, JOG highlighted.
Necessary engineering work is on track, with the first offshore survey completed in May and a second survey scheduled for this month. Additionally, work on completing the remaining workstreams, including subsurface studies and operational verification, is advancing.
Major contract awards and capital commitments for the Buchan project are expected in 2025, targeting first production in late 2027. This timeline is subject to securing fiscal clarity from the next government, the company noted.
The company’s valuation of the Buchan redevelopment project remains unchanged under the current fiscal policy.
JOG highlighted that it is fully funded with a current cash position of over £13 million.
The Buchan project remains fully carried to FDP, with a further $20 million payment due to JOG following approval by the North Sea Transition Authority (NSTA).
Also, it has a full carry to first oil for its 20% equity stake in the project, with the farm-in covering the field development costs.
Published: 05-06-2024
