“We now plan to launch a farm-out process, which we expect to be highly attractive to a wide range of oil companies in light of the project’s scale, economics and low carbon potential,” said Andrew Benitz.
Jersey Oil and Gas PLC (LON:JOG) has reported key findings from a concept selection report for the proposed Greater Buchan Area project, in the North Sea, highlighting the potential for 172mln barrels of oil resources to be developed from a fully electrified platform.
It said the project could deliver low carbon intensity by using the this type of platform, used presently in the Norwegian sector of the North Sea.
“The GBA has the scale to be extremely low carbon through platform electrification at the same time as offering highly favourable project economics,” said Andrew Benitz, Jersey chief executive.
In a statement, the company noted that it is on-track to deliver the concept selection to the Oil and Gas Authority (OGA) by July this year.
Today’s report detailed a potential three-phase development project around a single offshore platform at the Buchan field, which would act as a hub for the other discoveries in the GBA.
Project economic estimates envisage pre-tax free cashflow of US$6.4bn, with a net present value of US$1.7bn estimated. Payback could be achieved in under 3 years and it would have an internal rate of return (IRR) in excess of 25%.
Total development costs are estimated to be around US$30 per barrel, with Phase 1 capital expenditure anticipated at around £1bn.
Operating expenses is forecast at just US$8 per barrel, once the field is at plateau production rates.
GBA’s nameplate capacity is seen at 40,000 barrels of oil per day, with a plateau of at least three years.
Jersey highlighted that with its preferred development concept now in place it is ready to launch a farm-out process to partner up and advance towards funding the project.
“We now plan to launch a farm-out process, which we expect to be highly attractive to a wide range of oil companies in light of the project’s scale, economics and low carbon potential through platform electrification, characteristic of certain fully electrified fields offshore Norway,” Benitz added.