Equinor purchase a 40% stake in the Rosebank project in the UK

A major shot in the arm was received by the West of Shetland area earlier this week when news came through the Norwegian oil and gas giant Equinor (doing a Kanye – formerly known as Statoil) did a deal which could see it putting a massive investment into one of the UK’s last major fields. 

On purchasing the 40% stake in Rosebank from Chevron, Equinor said it is one of the biggest undeveloped finds on the UK continental shelf. Estimates put the volume of crude oil inside it at more than 300m barrels.

The field, which sits around 80 miles north-west of Shetland in water depths of about 1110m, was discovered 14 years ago, but Chevron stalled on its plans to develop it in 2014 when oil prices tumbled. This was the beginning of firms reducing investment in the North Sea.

However, as prices returned and the cost of delivering services went in the opposite direction, firms are now looking with fresh eyes at the opportunities.

On Monday Equinor said that it plans to move forward with its new partners on the Rosebank project: Suncor Energy, the Canadian firm which owns the same share, and Siccar Point Energy, a UK firm, that has the remainder. According to Wood Mackenzie’s Kevin Swann – senior research analyst – though Equinor may have spotted how to reduce costs, it could still cost upwards of $6bn to get started.

Al Cook, VP of global strategy and business development and UK country manager said: “We have a proven track record of high value field development across the North Sea and will now be able to deploy this experience on a new project.”

Deirdre Michie, the CEO of industry body Oil & Gas UK, underlined the significance of the purchase: “As industry continues to emerge from one of the most testing downturns in its history, its challenge is to hold firm in its approach and build upon the investment conditions which have helped improve competiveness.”

The body has been advocating for lowering costs and cutting taxes and hopes this will support the North Sea’s fortunes. The same is felt by Wood Mackenzie with Swann saying: “Equinor can come inn and more this project forward. We believe this deal is good for the project, the other partners in the project and the UK upstream sector.”