Halliburton has bagged a five-year contract to service Repsol SA’s assets on the United Kingdom’s side of the North Sea.
“Halliburton will provide subsurface technology, drilling and completion services, and digital solutions for major new developments”, Houston, Texas-based Halliburton said in a press release. The contract also covers decommissioning.
“The company will deliver a rigless intervention framework that enables Repsol Resources UK to optimize well construction, production, and intervention to maximize plug and abandonment operations”, Halliburton added.
“The two companies aim to establish an industry standard for innovation and economic growth”.
Repsol-NEO JV
In March Spain’s Repsol and Aberdeen-based NEO Energy Group Ltd. announced a deal to consolidate their UK North Sea assets. “The transaction will immediately position the new joint venture as a market leader in the UKCS [UK continental shelf], with a projected 2025 production of approximately 130,000 barrels of oil equivalent per day”, a joint statement said.
The JV’s portfolio “will ensure a steady production stream and the flexibility to capitalize on emerging opportunities”, the companies said. “This strong asset base will enable the company to continue to deliver operational efficiencies while pursuing organic growth”.
Repsol UK holds interests in 48 producing and non-producing oil and gas fields. NEO UK’s portfolio includes Penguins, Culzean, Gannet, Shearwater, Britannia Area and Elgin Franklin.
The new entity, which would be 45 percent owned by Repsol and 55 percent owned by NEO, will operate 11 production hubs and “substantial undeveloped reserves”, the companies said.
“Repsol contributes operational capabilities on production, development, and decommissioning activities which will be combined with NEO Energy expertise on financial and commercial matters”, said Repsol chief executive for exploration (E&P) and production Francisco Gea.
NEO UK chair John Knight commented, “The combined company has much more scale and diversity and opportunities for cost consolidation and portfolio high-grading giving resilience despite the tough conditions in the UK”.
“The benefits of synergies from consolidation will create much stronger value creation, profit and cash flow yield for shareholders and more options for capital allocation decisions well into the next decade”, Knight added.
The Repsol-NEO statement added, “Aligned with market standards in the UKCS, Repsol E&P will retain a [decommissioning] funding commitment up to a nominal amount of $1.8 billion, representing approximately 40 percent of the decom liabilities related to its legacy assets. Repsol E&P will continue to provide decommissioning security for existing Repsol E&P legacy assets”.
NEO and Repsol expect to complete the transaction in the third quarter, subject to customary conditions.
To contact the author, email jov.onsat@rigzone.com
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