Norwegian player seeks operatorship as MOL Norge offloads two North Sea discoveries

Following an agreement with Hungary’s MOL, Norway’s Lime Petroleum will expand its North Sea portfolio with more acreage, including two existing discoveries.

Singapore’s Rex International informed on Monday that Lime Petroleum, the firm’s 91.65 per cent subsidiary, signed an agreement with MOL Norge, a subsidiary of MOL Hungarian Oil and Gas (MOL), on 14 April 2022 to acquire the latter’s 40 per cent interests in licences PL820 S and PL 820 SB in the North Sea.

As a reminder, MOL has been actively working on selling off its assets lately. In line with this, its subsidiary in March 2022 entered into a binding Sale and Purchase Agreement with Waldorf Production for the divestment of its UK subsidiaries, comprising its entire UKCS business.

Lars Hübert, Chief Executive Officer of Lime, commented: “The acquisition of interests in the PL820 S and PL 820 SB licences offers a great opportunity for Lime to step into the operator role and thereby further boost our competitiveness for more opportunities and enhance our standing with licence partners and the authorities.”

The two MOL Norge-operated licences include the Iving and Evra discoveries situated on the Utsira High area adjacent to the Vår Energy-operated Balder field, and just north of PL818 Orkja and PL867 Gjegnalunden in which Lime has 30 per cent and 20 per cent interests, respectively. According to Rex, Lime will seek to assume operatorship of the licences. This is subject to regulatory approval. The company gained experience in the area from the exploration and appraisal drilling on the Rolvsnes discovery.

“The Iving and Evra discoveries lie in a prolific part of the North Sea, with world-class producing assets nearby, as well as other recent discoveries. Lime will work to mature the Iving and Evra discoveries as well as the other prospects within the licence, hopefully resulting in further drilling within the licence in the next 18 to 24 months,” added Hübert.

The two existing discoveries were made in 2019 and appraised in 2021 with hydrocarbons encountered in five separate reservoir layers. Based on the Norwegian Petroleum Directorate’s report, the discoveries contain recoverable resources of 1.82 million Sm3 of oil equivalent or some 11.45 mmboe. In addition, Lime’s analysis – including the use of the Rex Virtual Drilling seismic technology – suggests upside potential in the recoverable volumes of the two discoveries while the area includes several sizable exploration prospects.

While the licences are located adjacent to the existing infrastructure, which is now being upgraded to extend the facilities’ lifespan, a tie-in of the PL 820 S/PL 820 SB discoveries is in line with the Norwegian Petroleum Policy and Regulation, which encourages regional co-ordinated developments to maximise value creation. On the other hand, a standalone field development based on conventional oil field technology may be considered, if larger volumes are encountered.

The transaction of these two new licences is pending regulatory approval, expected to be announced upon completion of the transfer of the interests. Once Lime gets all the approvals out of the way and closes the transition, its partners will be Pandion Energy, Wintershall Dea, and Lundin Norway.

Dan Broström, Executive Chairman of Rex International Holding, remarked: “Lime’s latest acquisition continues the group’s efforts to build up our reserves and resources portfolio. In 2021, Lime added non-operated production from the Brage field to its portfolio, alongside non-operated field development projects.

“Lime has been very active in these projects, and the next natural step is to seek operator status. The Iving and Evra discoveries will offer that possibility, subject to consent from the authorities and partners.”