Offshore staff
LONDON — Serica Energy expects to spud its North Eigg exploration well in the U.K. North Sea early this summer.
The well will target more than 60 MMboe of prospective resources, with results likely issued by early October.
North Eigg is close to the Rhum gas-condensate field, which is connected to the Bruce production complex to the south. Here a light well intervention campaign (LWIV) has started on the Bruce M1 well. The aim is to add reserves and prolong production from various subsea wells.
Serica’s share price dropped following the U.K. government’s announcement late last month of an Energy Profits Levy. Fiscal instability is unwelcome in an industry with long lead times for capex, the company said, although it acknowledged the government’s accompanying package of incentives, designed to encourage reinvestment of North Sea profits.
Both the North Eigg well and the LWIV, with combined expenditure this year of about £60 million ($75.3 million), could benefit, with each £1 invested by Serica incurring an overall tax saving of up to 91.25 pence. This could offset much of the amount the company would otherwise be liable to pay from its profits under the terms of the new levy.
CEO Mitch Flegg said, “We… encourage policy makers to consider the importance of fiscal stability in enabling government and industry to meet the mutually set objectives of sustaining investment in the U.K. Continental Shelf at a level capable of ensuring security of oil and gas supply in volatile markets.”
06.06.2022
