EnQuest PLC is to buy a 25% stake in Magnus oil field in the UK North Sea from BP PLC, along with smaller interests in the Sullom Voe oil terminal, the Northern Leg Gas Pipeline, and the Ninian Pipeline System for $85 million.
EnQuest has the option to acquire BP’s remaining 75% of Magnus and BP’s interests in the associated systems.
EnQuest currently has 3% in Sullom Voe and will add 3%. The company has 5.9% in Northern Leg and will add 9%. It has 2.7% in Ninian and will add 3.83%.
The agreement is subject to various approvals. EnQuest will become operator after a transition of up to 12 months.
Payment will come from cash generated from the assets.
“Magnus is a good-quality reservoir,” said Amjad Bseisu, EnQuest’s chief executive officer. “It has large volumes in place, with potential for infill drilling and for the revitalization of wells, and scope for field life extension.”
“This is an innovative deal which will open a new chapter in the life of Sullom Voe and the productive life of Magnus, an iconic North Sea oil field,” said Deirdre Michie, chief executive of Oil & Gas UK. “It also sends a very positive signal on the opportunities available in the North Sea and is an indication of confidence that, even after producing oil for more than 30 years, this mature field still has more to give.”
EnQuest also has the option to receive $50 million from BP for managing the physical decommissioning of Thistle and Deveron fields.