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BBN ….interesting life span numbers . If memory.serves the 'refurb ' of the BleoHolm was designed to give the vessel 8 more active years , Further Repsol have a corporate policy for the transition away from oil ,of only investing in projects with a max life of 8 years , Coincidence ?
A farm in to Serenity for both RRE and Repsol ? Repsol as operator
@MTSparky, Understood and apologies if I misread your view point. As I say, its in both parties interest to get a deal done on Bleoheim because it is so under utilised, even if Tain comes on line without Serenity, which is unlikely to happen.
Whilst I am thus far more reserved with my views on RRE and their future intentions towards I3E and their assets, what is clear, is that Serenity and Liberator are very desirable assets, because they can deliver so many cost savings for the Bleoheim, and that means Repsol/RRE.
The table on page 52 of the CPR, shows the Blake/Ross fields continuing through until 2030.
Tain at circa 23mmbbl recoverable oil, even at its anticipated highest extraction rate (6,700 bopd), has a 9-10 year shelf life.
At $80m per annum costs, that's $800m in Bleoheim production costs over that same 10 year period, that Repsol/RRE have got to carry without Liberator/Serenity. So a deal has got to be done. The key is that a purchase/buy in of Serenity/Liberator, would deliver not only the cost savings from the shared production (so I3E owned) but would also greatly increase their own return per barrel too, which has got to be a very seductive thought. Certainly enough to warrant a closer look.
That for me encourages the farm out offer, if indeed it were to come, to be higher than that of an outside party, because the overall benefits are greater for Repsol/RRE, as their own existing costs per barrel, would be lowered.
Timing will be everything, and certainly the next 2 drills would be completed prior to any deal being done. So I3E's position would be (with success at Liberator) about as strong as it could be. Certainly, the period up until 30th April and/or the signing of the RBL, is a critical period.
But as I say, that $800m is a key cost, and a reflection of what Liberator/Serenity can help deliver, and what it could be worth to the likes of Repsol and/or RRE.
RRE have $1bn in funding available
Repsol Sinopec made a profit of about $1.7bn last year
Ergo, I think they RRE/Repsol will deffo make an offer for i3e or farm in and it will need to be a good offer. 80m barrels @ $5-$8 per barrel for Serenity...yes please...;o))
My point is, Repsol/RRE will want the oil from Serenity going through Bleo Holm to make the production/OPEX economics work better for them and lengthen the life of Bleo Holm.
I am not so sure that Repsol/RRE have so much room to be political regarding the Bleoheim.
Firstly, the current last known status of the agreements for the Bleoheim FPSO for Liberator oil, was stated on 10th Jan 2019 ;
"The Company also announced that it had received indicative terms from Repsol Sinopec Resources UK Limited ("RSRUK") for Liberator's use of their leased Bleo Holm FPSO facility via Ross field infrastructure, and that the parties were working together to agree the terms for Liberator Phase I construction and tie-in, and transportation, processing and operating services agreements."
Further to this we have the wording from the LIB Phase 1 CPR (See pages page 48 - 52). Whilst the CPR is now technically out of date, in terms of the Bleoheim, it remains relevant.
Firstly, according to the CPR, the Bleoheim has a total capacity of 100,000 bopd and 135,000 water bbls per day.
The key considerations are (oil production wise) that the Blake/Ross production is expected to be around 8,000 bopd per day by 2022. At that point, currently, Tain is expected to add upto 6,700 bopd from two wells. That would make total Repsol/RRE production around 15,000 bopd, with further decline expected from Blake/Ross moving forward.
Page 52 of the CPR states ; "The latest lease and operating and maintenance costs for the FPSO have not been shared with i3 but are stated by Repsol to be around $80 MM per year."
Without further oil production from either Liberator and/or Serenity, Repsol/RRE have to carry this full maintenance costs alone.
Even at 15,000 bopd per day (5,475,000 per annum at 365 days), the Bleoheim would be adding up to $14.60 per barrel.
By accepting a deal with I3E for Liberator phase 1 (assumed 20,000 bopd), on a like for like basis, they can reduce this cost per barrel to c. $6.30 per barrel.
At 5,475,000 x $8.30 ($14.60 - $6.30), they have the ability to reduce their own costs by up to $45.5m. Include the Serenity field, which could add another 3 wells to a combined Serenity/Tain scheme, and things look even rosier.
Yes I3E have to find the right balance between bending and standing firm, but at $45m per annum and rising, so do Repsol too.
Admittedly the calculations are very basic, but these are the figures that I3E have provided the CPR team, so they were relevant at that time. So do have worth.
So for me it is within both parties interest to work together, even if any party involved, has eyes on a greater prize or not.
https://i3.energy/wp-content/uploads/2017/03/20171103-Liberator-CPR-2017-Phase-1-vF-1.pdf
I think politics around Bleo Holm will play a big part in what happens regarding Repsol/RRE and the Serenity/Tain development project.
page 3/5 Bleo Holm latest Projected Ullage (% of maximum capacity) 2019 - 2020-2021-2022-2023
https://www.repsolsinopecuk.com/files/Bleo-Holm_-2019-Final.pdf