Norway’s Aker BP will buy Equinor’s stake in the King Lear gas/condensate discovery in the Norwegian section of the North Sea for $250 million.
As part of the agreement, Aker BP will acquire Equinor’s 77.8 percent interest in the blocks containing the discovery, dubbed one of the largest undeveloped finds in the area. The company already has an idea how to develop the discovery – via the Ula hub.
The Ula hub consists of three conventional steel facilities for production, drilling and accommodation, and is connected by bridges.
Karl Johnny Hersvik, CEO of Aker BP said: “The King Lear discovery is one of the largest undeveloped discoveries on the Norwegian Continental Shelf, and represents an excellent opportunity for Aker BP. Our goal is to develop King Lear as a satellite to Ula.
“This will improve the capacity utilization at the Ula facilities and provide significant additional volumes of injection gas to support increased oil recovery from the Ula field.”
Net recoverable resources in the King Lear discovery are estimated to 77 million barrels oil equivalents (“mmboe”) according to data from the Norwegian Petroleum Directorate. When including the increased oil recovery potential from Ula, Aker BP estimates a total resource addition of more than 100 mmboe net to the company.
While Hersvik describes the King Lear as an excellent opportunity, Equinor sees the find as a non-core asset.
Jez Averty, Equinor’s senior vice president for operations in the southern North Sea said:“This transaction is a further example of our strategy of capturing value from active portfolio management through the oil price cycles. We are divesting a low-priority asset in our NCS portfolio to a buyer who sees higher value. By doing so we unlock capital for investment in projects that offer higher returns for Equinor.”
King Lear is located approximately 50 km south of the Ula field centre, in production licences 146 and 333. The transaction covers Equinor Energy’s 77.8 percent interest in the two licenses. The remaining 22.2 percent interest is held by Total E&P Norge. The transaction is subject to approval by Norwegian authorities.