North Sea Reporter

Published by KL ENERGY PUBLISHING LTD.

North Sea Reporter is an established and respected weekly publication which provides

in-depth news and analysis of the NW European offshore oil and gas industry. 

News

ConocoPhillips is considering a potential sale of its oil and gas business in Norway, as well as the Teesside oil terminal in the UK, after receiving “an unsolicited offer” for the assets. The US oil company, in a short statement, said it had notified employees, partners and regulators that it was evaluating a potential sale of the Norway and UK assets after the offer was made. It said the evaluation was consistent with its “disciplined strategy to optimise and high-grade its portfolio”. However, the operator added that: “If we do not receive an offer that meets the company’s expectations for value, ConocoPhillips will retain the assets.” Should a deal ultimately be agreed, however, and see ConocoPhillips sell its Norwegian business it would mean the departure of one of the original pioneers of the country’s oil and gas sector. ConocoPhillips has been active in Norway since the 1960s when then-Phillips Petroleum participated in the country’s first licensing round in 1965 and then made its first commercial discovery in the Ekosfisk field in 1969.

Rig market

Valaris has reported the award of new contracts and contract extensions, with an associated contract backlog of around $220 million, excluding lump sum payments such as mobilisation fees and capital reimbursements. For the contractor’s jack-up fleet, the awards include a multi-well P&A contract in the Southern North Sea. The contract has a start window up to December 2030 and an estimated duration of 341 days. The contracted revenue backlog is estimated to be $41.5 million and is subject to an annual cost escalation mechanism effective from the contract execution date. The contract also includes a one-well option with an estimated duration of 19 days. In the Danish North Sea, Ineos has extended a contract with the Valaris-122 which is expected to start in February 2027 in direct continuation of an existing programme and has an estimated duration of 126 days. The operating dayrate is $115,000. The contract includes additional options with an estimated total duration of 699 days for work in the UK and Danish North Sea.

Field development

Equinor has revealed the cost estimate for the Snøhvit Future project has climbed from NKr20 billion ($2.1 billion) in December last year to NKr26.5 billion. The revised figure has been reported to the energy ministry in connection with the government’s proposed national budget for 2027. The operator adds that the timetable for the project remains unchanged, with onshore compression planned to start in 2029 and electrification in 2030. When the PDO for Snøhvit Future was submitted in 2022, the investment estimate was NKr13.2 billion, which adjusted to today’s kroner value, corresponds to NKr15.2 billion. Trond Bokn, Equinor senior vice-president for project development, says: “The project is being carried out at an operating facility and is more complex than anticipated. It has also been affected by unforeseen issues and challenges.” He points out that operational challenges at the Hammerfest LNG plant, weather conditions and difficult rock conditions in the power cable tunnel have affected progress and costs.

Weekly coverage includes:

  • Rig Market - contracts, dayrates and utilisation
  • Drilling – a round-up of North Sea activity 
  • Construction and engineering
  • Field development and production
  • Contract awards
  • Company news
  • Data tables of industry activity
  • Mediterranean & W. Africa briefing
  • News briefs