Canadian oil company Suncor is buying into the Fenja development in the Norwegian Sea in a transaction worth $54.4 million.
Suncor will acquire a 17.5 percent stake in the offshore oil field from Faroe Petroleum. Faroe, which will retain a 7.5 percent interest in the project, said on Monday the transaction would to reduce its future capital expenditure on Fenja to approximately £70 million.
Faroe said it remained “fully committed to the Fenja development and believes the entry of Suncor further demonstrates the attractiveness of the project on a stand-alone basis.”
VNG Norge AS, the operator of the field, in December 2017 submitted the plan for development and operation (PDO) for the Fenja The partners are planning to invest NOK 10.2 billion ($1.2B), with planned production start in 2021. The production period is expected to be 16 years.
The Fenja field is located at Haltenterassen in block 6406/12, about 120 km north of Kristiansund. The field contains recoverable resources of approximately 100 million barrels oil equivalents, mostly oil (11.0 million standard cubic meters of oil, 3.4 billion standard cubic meters of gas and 0.57 million tonnes of NGL). The figures include the Pil reservoir, while the Bue reservoir represents a possible upside in the field development plan.
As for the Faroe-Suncor transaction, Faroe expects it to close in the first half of 2018.
Graham Stewart, CEO of Faroe, said: “This transaction marks a major milestone for Faroe, which has taken Fenja through exploration and appraisal drilling to predevelopment work and validates Faroe’s business model of generating tangible shareholder returns from its exploration portfolio. Having held a significant interest in PL586 from its discovery, Faroe has now generated cash returns through a partial-monetzation while still giving shareholders exposure to future cash flows from a continuing interest in this high quality project.”