A North Sea oil and gas field at the centre of a war over the future of the UK’s energy supply will be taken over by new owners who say it is a “huge opportunity” that will create thousands of jobs.
Ithaca Energy has agreed a deal to buy Siccar Point, the owner of the Cambo North Sea oil and gas field, in a deal worth up to $1.46 billion (£1.1bn).
Cambo became a major symbol in the fight between environmental campaigners who believe fossil fuel production must end and big oil, which prefers a more gradual shift to low carbon energy in coming decades.
Reports of Cambo end premature
Campaigners claimed a “death blow” for the project when oil and gas giant Shell withdrew its support for the development of the field in the wake of environmental conference, COP26, and opposition from First Minister Nicola Sturgeon.
The deal is likely to see the field come back in to play and comes hot on the heels of the UK government’s renewed support for the development of more North Sea oil and gas in its energy strategy.
Ithaca, which is owned by Israeli energy firm Delek, said Cambo and another significant field in which it now owns a stake, Rosebank, represented “a huge opportunity” that would create thousands of jobs.
Alan Bruce, the chief executive of Ithaca, said: “Cambo and Rosebank fields is a huge opportunity to not only help secure the UK’s energy future for at least another quarter of a century, but also to create thousands of direct and indirect jobs in the process.
“We are excited about the future for the enlarged Ithaca, the role we will play in the UK’s energy supply, and look forward to welcoming our new colleagues from Siccar Point.”
Ithaca said the Cambo field on its own is anticipated to deliver up to 170 million barrels of oil equivalent during its 25-year operational life.
It said this would “materially (help) to reduce the need for the import of more carbon intensive alternatives and increasing the UK’s energy independence through the energy transition”.
Will Cambo be producing next year?
It said it expects to make a “final investment decision” (FID) on both fields next year.
Bruce, who was appointed to the top role last month following the death of the firm’s former head Bill Dunnett last year, hailed the deal as “transformational” for the firm, whose owners Delek is one of Israel’s largest companies.
He added the deal “cements” its position as a leading exploration and production (E&P) operator in the North Sea.
“The acquisition doubles our recoverable resources and means that we now have interests in a significant portion of the largest UKCS fields,” he said.
“This includes interests in two of the UK’s most strategically important and near-term developments which will enable us to play an increasing role in securing domestic energy supply for the UK.
“We firmly believe that this transaction will deliver value for all of our stakeholders including the local community and wider UK economy.”
Ithaca bought Chevron’s North Sea business in 2019.
Siccar Point also holds stakes in the BP Schiehallion (11.75%) and the Equinor Mariner (8.89%) fields, both in the top 10 producers in the UK.
Shell recently confirmed it is retaining its 25% non-operated holding in the project, having said in December it wouldn’t progress it to an investment decision.