No Kraken stake for Israel’s Delek

no-kraken-stake-for-israels-delekIsraeli energy firm Delek Group will not be taking a share in the UK North Sea Kraken development after the negotiations with EnQuest fell through.

To remind, On July 18, EnQuest announced that it was in discussions with Delek with regard to the potential sale to Delek of an interest in the Kraken development.

However, the UK operator on Thursday said this: “EnQuest and Delek have ultimately been unable to reach an agreement and those discussions have now terminated.”

This was also confirmed by Delek which added it would continue to review additional strategic synergies in E&P in international markets as part of its strategy to establish an international operating arm.

Delek and EnQuest had signed a non-binding memorandum of understanding, under which Delek would buy a 20 percent share in the Kraken, and sign a joint operating agreement. While Delek ha in July said there was no certainty that a binding deal would be signed, but the company on August 30 hinted the talks were progressing well. Not so well, after all.

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.

The FPSO to be deployed at the field, the Armada Kraken, was named in Singapore in August.

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.

Offshore Energy Today Staff

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