LONDON, UK: Ithaca Energy, a leading North Sea oil and gas operator, has signed an agreement with Shell U.K. Limited to market Shell’s 30% working interest in the Cambo field, the second-largest undeveloped oil and gas discovery in the UK North Sea. The field is located in the West of Shetland region and offers long-term production growth for Ithaca Energy at a low expected unit operating cost per barrel.
Under the agreement, Shell may market and sell a portion or the entire 30% interest, and if it chooses not to sell its entire interest, any remaining portion not sold to a third party will be sold to Ithaca Energy. The agreement also provides Ithaca Energy with the option to acquire the Option Stake at a value of $1.50 per boe of the P50 resource volumes being acquired pursuant to the development plan.
The Cambo field has the potential to be one of the lowest-emission intensity assets in the North Sea due to its modern, energy-efficient design and potential for electrification. The field is expected to produce at less than half the CO2 intensity than the average UK field, thanks to its fully electrification-ready FPSO design, zero routine flaring, and the Sevan FPSO hull design reducing power demand.
Alan Bruce, Chief Executive Officer of Ithaca Energy, commented that the agreement with Shell is a meaningful step towards the development of Cambo, and the field is a key asset in helping maintain the UK’s future energy security. However, Bruce also expressed concerns over the amended Energy Profit Levy and the fiscal instability it has created, which is constraining their ability to invest. The company is actively engaging with the UK government in pursuit of the fiscal stability required to make critical investment decisions that will support the UK’s long-term energy security.
Shell’s Senior Vice President, UK Upstream, Simon Roddy, said that following an internal review, the company has decided to sell its 30% working interest in Cambo and has agreed to the marketing process with Ithaca Energy. The sale of Shell’s stake in the field is expected to be completed this year.
BP to acquire Shell’s 27% stake in Browse joint venture, expanding Australian gas resources