Much has been said about North Sea oil having had its heyday. But just because the oil majors are withdrawing, that doesn’t mean there is no extraction. Clarissa Dann looks at how reserve-based lending is supporting the smaller independent oil producers that are thriving in the region
In May 2017, after 40 years at sea, the 44-metre tall, 24,000-tonne Brent Delta oil platform was brought ashore in one piece to ABLE Seaton Port in Hartlepool, where 97% of the material is destined for recycling.1
As the North Sea hydrocarbon era turns 50, with the first oil discoveries made in 1969, there are more headlines about decommissioning (and an entire new industry of service providers dedicated to this) than exploration and production (E&P). But North Sea E&P is by no means
a sunset industry.
The North Sea industry body Oil & Gas UK estimates that, while 43 billion barrels have already been extracted, there are at least 12 billion more recoverable barrels of oil equivalent (boe) still out there.
As oil majors invest elsewhere and giant European utility companies retrench from hydrocarbon extraction, there has been a growing appetite from a new breed of agile, independent oil E&P entities acquiring competitive assets, and eagerness to reach once inaccessible or undiscovered reserves.
This article takes a closer look at how the technique of reserve-based lending has, alongside private equity (PE), changed the face of oil production in the North Sea. It also takes a closer look at some recent transactions as examples.
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