Offshore staff
LONDON – Chevron is looking to sell its 40% operating stake in the deepwater Rosebank oil field.
The company discovered the field in 2004, 125 km (77.7 mi)west of Shetland and close to the median line with the Faroe Islands.
According to analyst Wood Mackenzie, it is the largest undeveloped field in the UK upstream sector, with estimated reserves of more than 300 MMboe. Prior to the oil price crash, Chevron and its partners had been working on adevelopment based on an FPSO.
Ross Cassidy, senior research manager, North Sea upstream at Wood Mackenzie, said: “Any buyer…will need to have very deep pockets to fund the capital cost of development, which we estimate at more than $6 billion in total.
“This could mean another large player looking to increase their exposure in west of Shetland or one of the largest private equity companies that have come on the scene recently.”
Any future development will likely involve a newbuild, harsh environment floater connected to up to 20 production wells, he added. Assuming a new operator was in place quickly, and a final investment decision taken next year, first oil could follow in 2024, Cassidy suggested, building to a peak of around 100,000 boe/d.
He cautioned, however, that “any future development will be challenging as the field is located in water depths of more than 1,000 m [3,281 ft], in a very harsh environment, with high winds and waves to contend with.
“The asset may be struggling to compete for capital within Chevron’s low breakeven tight oil portfolio, focused on the US Permian basin. But a sale would reduce Chevron’s pool of conventional growth opportunities, increasing its dependence on delivering in the Permian.
“Chevron is actively reducing its European portfolio. On Sept. 25, it was announced that Total will acquireChevron’s Danish upstream business. The company is also looking to sell other assets in its UK North Sea portfolio.”
09/27/2018
