IOG.L Share News (IOG)

(Sharecast News) - Independent Oil and Gas announced on Thursday that, as operator of its joint venture with CalEnergy Resources UK, it has awarded a sizable engineering, procurement, construction and installation contract to Subsea 7.
The AIM-traded firm said the contract would cover the subsea, umbilicals, risers and flowlines (SURF) work on phase 1 of its core project in the UK Southern North Sea (SNS), and was "almost entirely" lump-sum in nature.

It said the award followed a competitive tendering process, and the recent approval of the phase 1 field development plan by the UK Oil and Gas Authority (OGA).

Phase 1 comprises the development and production of the Southwark, Blythe and Elgood fields through a total of five wells, with gas transported onshore via the Thames Pipeline.

The SURF contract incorporates project management, engineering, procurement, construction and installation activities for the subsea elements of phase 1.

Those would include a six kilometre, 24-inch extension to the Thames Pipeline to the Southwark platform; a 25 kilometre, 12-inch line connecting the Blythe platform to the Thames Pipeline; and a nine kilometre, six-inch pipeline and an umbilical connecting the Elgood field to the Blythe platform, and associated subsea structures and tie-ins.

IOG said "extensive" progress had already been made with Subsea 7 before the final contract award, under a letter of limited commitment, to ensure that all work streams had commenced and continued on schedule since final investment decision in October, in anticipation of the field development plan approval.

As it had recently announced, the 24-inch Southwark and 12-inch Blythe line pipes had been manufactured and transported to the UK ahead of planned installation, scheduled for the second half of 2020, and Subsea 7 was progressing detailed engineering work in support of that campaign.

"We are pleased to be working with Subsea 7, a globally recognised leader in offshore energy services, for the SURF scope of phase 1 of our core UK SNS gas development," said chief executive officer Andrew Hockey.

"They will be an important contractor for IOG in ensuring safe and efficient phase 1 execution, which includes the offshore pipelay campaign being prepared for the second half of this year.

"We have already been working with Subsea 7 for several months under a pre-contractual arrangement and with the contract now finalised we look forward to further developing our constructive relationship."

At 1255 BST, shares in Independent Oil & Gas were up 5.53% at 12.4p.