Omani oil group Petrogas and private equity fund HitecVision have joined forces to purchase a portfolio of Total’s British North Sea oilfields for $635 million.
The portfolio includes oilfields in Dumbarton, Balloch, Lochranza, Drumtochty, Flyndre, Affleck and Cawdor and minority stakes in China National Offshore Oil Corporation (CNOOC)-operated Golden Eagle, Scott, and Telford.
HitecVision and Petrogas will take over four oilfields from Total. The fields will be owned by a subsidiary of the two groups called Petrogas NEO UK.
The fields are set to produce 25,000 barrels of oil equivalent per day this year. Petrogas NEO UK wants to take production to more than 100,000 barrels of oil equivalent per day within two to three years through organic as well as in-organic growth.
Petrogas NEO UK will also acquire shares in 10 fields from Total. The portfolio includes stakes in the Golden Eagle and Dumbarton fields which lie around 70 and 135 miles northeast of Aberdeen.
Big companies are selling their oilfields in the British North Sea to private equity backed operators. The changes have come after oil price collapsed to below $30 a barrel in 2016.
However, the new buyers described the North Sea oilfields as prospective and said the current acquisition is the first step in the realisation of this strategy and provides a fundament for further expansion through organic and in-organic activities.
Private equity-backed Chrysaor has bought big North Sea portfolios from Shell and America’s ConocoPhillips in multi-billion deals.
Total said the North Sea still remains core to the business. The company acquired the North Sea portfolio for £5.8 billion from Maersk Oil in 2017.