AIM-listed Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on the UK Continental Shelf region of the North Sea, is pleased to announce that the North Sea Transition Authority ('NSTA') has approved an extension to the Second Term of the P2170 'Verbier' licence as part of aligning the duration with that of the P2498 'Buchan Horst' ('Buchan') licence.
GBA Licences
The 'Second Term' of a UK offshore oil and gas licence sets the period in which the licencees are required to obtain Field Development Plan ('FDP') approval for the area in order to subsequently move into the 'Third Term', which covers the development and production phase of activities for the life of a field.
The Second Term of the P2170 licence has now been extended by approximately six months, to 28 February 2027, thereby aligning it with the corresponding duration of the P2498 Buchan licence. Aligning the Second Terms of both Greater Buchan Area ('GBA') licences logically reflects the NSTA's objectives for an integrated 'Area Plan', which has always been regarded by the joint venture partners as requiring a phased development solution led by the initial exploitation of Buchan's resources.
As planned, a request to extend the Second Term of the Buchan licence will be made to the NSTA towards the end of this year, with the request incorporating an overall development schedule that includes a further extension request for the P2170 licence.
GBA Activities
As previously announced, the slowdown in Buchan development activities that has resulted from the continuing industry uncertainties created by successive UK governments, has led to the optimal development solution being re-assessed within the context of a wider lens and a longer execution schedule than was initially envisaged. While redeployment of the 'Western Isles' floating production, storage and offloading vessel was set out as the solution in the draft FDP submitted to the NSTA, it is recognised that the passage of time means that other potential production solutions warrant further screening and consideration.
As part of its central objectives for managing the future resources of the UK North Sea, the NSTA is seeking to ensure that the GBA joint venture continues to look at the wider opportunity to connect volumes in the vicinity of a Buchan based production hub as part of an integrated evaluation and plan with potential third-party resource owners.
Work on these activities will continue into 2027 and the joint venture partners are in the process of establishing a work plan and budget for next year that will support progression of the GBA and the licence extensions.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
'We are pleased to receive a licence extension on our existing Verbier licence, which now aligns the timing of both of our GBA licences, as we continue to work on engineering the optimal development solution for the area. As we have always highlighted, there is an exciting opportunity to unlock the resources across the area through the development of a Buchan-led production hub.
'We continue to urge the government to work constructively with industry on critical oil and gas development approvals and bring an early end to the Energy Profits Levy, which has unquestionably led to a significant slowdown in investment activity. The extended approval processes for developments that the UK's regulatory landscape has created presents a complicated backdrop for progressing key projects. With hydrocarbons continuing to account for around 75% of total energy usage in the UK, we believe that homegrown energy should always be prioritised over imports and we are encouraged that there are early indications following the recent cabinet changes of potential support for our domestic industry. This support will only work through delivery of the fiscal and regulatory reforms required to unlock long term investment, protect jobs, strengthen energy security and support the energy transition.'
Source: Jersey Oil & Gas
