EnQuest has completed the acquisition of an initial 25% interest in BP’s UK North Sea Magnus oil field, a 3.0% interest in the Sullom Voe Oil terminal and supply facility (‘SVT’) and additional interests in associated infrastructure from BP as planned.
Under the agreement originally announced in January, the acquisition price of $85 million is expected to be met by EnQuest from the sharing of future cash flows from the assets and the agreement will not include any upfront payment to BP.
Furthermore, EnQuest has an option, exercisable between 1 July 2018 and 15 Jan 2019, to purchase BP’s remaining 75 percent interest in Magnus, a further 9 percent interest in SVT and the remainder of BP’s interests in the associated pipelines for a consideration of $300 million.
Under this option, after recovery of consideration and adjustments, BP would also retain 50 percent of net cash flows from these assets, up to a limit of $1 billion. The consideration for this further acquisition would be met by EnQuest through a mixture of cash and future asset cash flows.
EnQuest is now the operator of both Magnus and SVT. The sale does not affect BP’s rights to capacity in SVT.
Oil production from the BP-operated Clair field will continue to be exported through SVT, and the new Clair Ridge development will also export oil to the terminal when it comes on-stream. Gas produced from the Foinaven and Clair fields will also continue to be processed through SVT. Gas from the re-developed Schiehallion and Loyal fields will export to SVT when they are brought back into production in the coming months.