UK-listed Xcite Energy is close to signing a memorandum of understanding for drilling services for its Bentley heavy-oil field in the UK North Sea.
Industry sources said signatures could be placed on the preliminary deal within days and that China Oilfield Service Ltd (COSL) is well-placed.
Upstream understands that, if selected, COSL will simultaneously sign a similar preliminary agreement to lease Singapore rig owner TS Offshore’s KFELS N Plus-design jack-up rig being built at Keppel Fels for the possible Bentley work.
The rig, which was ordered in March this year, would be ready for operations in 2017 under a contract that could run for seven years, sources said.
Other bidders Xcite is talking to are understood to be Maersk Drilling and Noble Drilling, said to be offering GustoMSC CJ54 and CJ62-design units respectively.
Another company, Norway’s Ocean Yield, is also understood to have bid a planned E-Class design unit. An Xcite spokesman declined to comment on the details of the tender, but said: “We have a tender process for the provision of a drilling rig. We have previously said that is the next role in the development group to fulfill, and we are evaluating a number of options.”
Xcite holds a 100% operating stake in Bentley, but is yet to secure funding and is on the hunt for farm-in partners, with the aim of bringing it online in mid-2018.
In the meantime the company has signed a series of MoUs to establish a risk-sharing development group in preparation for delivering a development plant to the UK authorities.
The latest MoU, with Baker Hughes for oilfield services, was announced last week.
The group also consists of Teekay for the project’s floating, storage and offloading vessel and Amec and Aibel for the platform.Xcite has also signed agreements with Statoil and EnQuest to explore sharing a common gas pipeline on their respective Bressay and Kraken fields.
Xcite chief executive Rupert Cole said: “All the MoUs we’ve signed set out the principles on which we are drafting the commercial contracts. So, each one is an important step towards the field development plan.
“The last key part is the drilling rig. And those discussions are also going well.”
Bentley is located in Block 9/3b and contains about 909 million barrels of in-place oil.
Rates are reducing in the North Sea, the dilution oil will be cheaper to buy, In monetary terms the discount to Brent is less and many of the older fields become less viable - Bentley is just as valuable industry assets when the oil is $130 as it is to when it's $86 per barrel.
as we know lenders were prepared to offer $155 million on the basis of around 'just' 28mb of the 116mb of the reserves (as they were at the time).
With at least 257 mb now on the books, and companies of the stature of Amec, Aibel, Arup, Teekay and Baker Hughes all looking to take material financial risk in the project, thereby underpinning the development, it would be reasonable to suspect a significant increase in RBL will be available.
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