Serica Energy extends Bruce field life to 2030

UK oil and gas company Serica Energy has extended the life of its flagship Bruce field in the North Sea through to 2030.

The Bruce complex lies 340 kilometres northeast of Aberdeen in the UK Sector of the Northern North Sea and consists of three bridge-linked platforms.

The subsea Keith and Rhum fields are both tied back to Bruce where they are transported and processed for export. Serica operates and owns 98 per cent of the Bruce field, 100 per cent of Keith and 50 per cent of Rhum.

Serica said in its annual report published this week that it was granted two extra years thanks to a boost in the estimated amount of reserves.

A new competent persons report increased the estimated remaining potential of the field to 61million barrels of oil equivalent. That is above the 62 million in January 2020 since net production in 2020 totalled more than 8 million barrels.

This latest extension is the second for Serica since it acquired the field in 2018 from oil major BP. With that, the planned shutdown of the field was pushed from 2026 to 2028, and, with this latest extension, to 2030.

According to the company, a combination of the resource upgrade and lower breakeven costs allowed Serica the extended time on the field.

Chief executive of Serica Energy Mitch Flegg said: “In the last two years we have extended cessation of production (COP) by a total of four years. This is a clear indication that our Bruce, Keith, Rhum life extension strategy is being successful”.

As already mentioned, Serica acquired Bruce, Keith, and Rhum from BP three years ago but also acquired additional stakes in Bruce and Keith from Total, BHP, and Marubeni.

That deal, first announced in 2017, was delayed since part of the Rhum field was Iran-owned and subject to sanctions from the U.S.

At the end of this year, Serica’s cash-sharing arrangement for the three fields with these companies ends. Currently, Serica retains 60 per cent of the net cash flow but this will increase to 100 per cent from 1 January 2022 which will, in Serica’s words, provide a significant cash boost to the company.

“Whilst we see significant benefits and potential in our existing portfolio and continue to look at new opportunities to expand our operations to diversify risk, provide new growth prospects, and achieve economies of scale.

“We are confident that we have the resources to deliver this strategy and the platform to create additional value for shareholders”, Flegg added.