Delek in ‘advanced talks’ to buy Kraken field stake

Delek in 'advanced talks' to buy Kraken field stake

Israeli energy company Delek Group is closing in on acquiring its first acreage in the UK sector of the North Sea.

To remind, the company in July started talks with EnQuest, the operator of the Kraken development in the North Sea, over a possible stake sale.

More precisely, Delek and EnQuest in July inked a non-binding memorandum of understanding, which entails Delek will buy a 20 percent share in the Kraken, and sign a joint operating agreement.

On July 18, 2016, the Company announced that it is conducting negotiations with EnQuest PLC, for acquiring a 20% working interest in the exploration and production licenses in the Kraken Field located in the UK North Sea. The Company has signed a non-binding memorandum of understanding and currently is in advanced negotiations to sign a binding agreement.

While Delek in July said there was no certainty that a binding deal would be signed, the company on August 30 hinted the talks are progressing well.

“The Company has signed a non-binding memorandum of understanding and currently is in advanced negotiations to sign a binding agreement,” Delek said on Tuesday.

The Kraken field is spread over 42 km, at a depth of 1,300 meters below sea level and contains, about 147 million barrels of heavy crude oil in the 2P probable reserves category. Production from the field is expected to star in the first half of 2017, and will take place using 25 wells (14 for production and 11 for injection) using a floating production and storage offload – FPSO.

With or without Delek, the works on the Kraken development are moving forward. The FPSO to be deployed at the field, the Armada Kraken, was named in Singapore this month.

Armada Kraken is able to handle a peak fluid rate of 460,000 barrels per day (bpd) and 80,000 barrels of oil per day (bopd), 275,000 bpd of water injection, 20 million standard cubic feet (MMscf) of gas handling and has a storage capacity of 600,000 barrels.

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