Jersey sheds North Sea license duo unrelated to Greater Buchan Area

UK-based oil and gas firm Jersey Oil & Gas (JOG) has decided not to progress to the next license phase on two North Sea licenses since they are not part of the Greater Buchan Area project.

The licenses in question are P2497 Block 20/4c (Zermatt) and P2499 Block 21/2a (Glenn), and JOG decided not to progress to the next license phase, which would have required committing to a firm well in each of these two licence areas.

JOG added that the licenses would automatically cease and determine at the end of Phase A of their initial term on 29 August 2021.

It is worth reminding that Jersey Oil & Gas is working to develop the Greater Buchan Area (GBA) oil production hub in the UK North Sea and has selected a development concept in early March this year.

The selected concept envisions a development centred around a single, normally manned, integrated wellhead, production, utilities, and quarters platform, powered from shore, to be located at the Buchan field.

According to Jersey, the selected concept for the GBA development is planned to be executed in three phases and neither Glenn nor Zermatt licenses were included in any of these phases.

Jersey said that this was due to the current sub-commercial status of the Glenn and Glenn North oil discoveries and in the case of the Zermatt license it was decided not to be added to GBA following the discovery of a higher ranked, drill-ready portfolio of exploration opportunities in Verbier.

The GBA development concept is based on P50 Technically Recoverable Resource estimates of, in aggregate, 172 MMboe of light sweet crude and associated gas within the Core GBA, which includes the Buchan oil field and J2 and Verbier oil discoveries.

The capex costs for GBA Phase 1 are estimated to be approximately £1 billion ($1.4 billion). The company is looking to produce first oil from the first phase in the fourth quarter of 2025. The second phase start-up would follow in 2027, and Phase 3 in 2028. On 11 March, the company formally launched a farm-out process for the GBA.

In a statement on Wednesday, Andrew Benitz, CEO of Jersey Oil & Gas, said: “JOG’s management has taken the pragmatic and cost-effective decision not to proceed with firm well commitments for the non-core Glenn and Zermatt licences in the context of efficient and targeted capital allocation.

“Jersey Oil & Gas fully respects the OGA’s Asset Stewardship Expectations which govern the delivery of exploration and appraisal work programmes, and we continue to work closely with the OGA as we progress our plans for the company’s core GBA development project“.