Siccar Point Energy has announced it will defer approval of its highly-anticipated Cambo development until the second half of next year due to the coronavirus outbreak.
Along with partner Shell, Siccar said the “unprecedented worldwide macroeconomic dislocation” of covid-19 means it has to delay a final investment decision (FID), which was expected in the third quarter of this year.
The West of Shetland project has an estimated 900million barrels of oil in place, with the first phase targetting 150m barrels via a floating production, storage and offloading (FPSO) vessel.
Cambo was expected to be one of the largest new field developments to be given the greenlight in 2020 for the UK sector.
However, chief executive Jonathan Roger said it “makes sense” to hold off until normality resumes.
He said: “Cambo remains an extremely attractive development with compelling economics.
“However, given the uncertainty of the global situation, including whether any people, goods and services can be mobilised in OECD countries, it makes sense to hold-off final approval until some normality returns to the market and a clear and robust path forward can again be established.
“In the meantime, Siccar Point is very well positioned with respect to this downturn having both substantial cash balances and very full hedging for 2020 and 2021.
“During the period of delay, we will continue to mature key aspects of the project to facilitate a swift and efficient ramp-up when market conditions stabilise.”
The Aberdeen-headquartered firm said it will continue to work with the existing supply chain to ready the project for FID next year, which is subject to approval of a licence extension request to the Oil and Gas Authority (OGA).
Cambo is one of several North Sea projects which Energy Voice reported last week was expected to be deferred as a result of the coronavirus outbreak.
The virus has brought a dramatic drop in the price of brent crude oil and reductions in offshore activity.
Siccar Point also has interests in the Mariner, Rosebank and Schiehallion fields, the first two being operated by Equinor and the latter by BP.
Cambo, about 78 miles north-west of Shetland, was discovered in 2002 and subsequently had four appraisal wells drilled up to 2012.
A final successful appraisal well was drilled and flow tested by Siccar Point in summer 2018.
Shell acquired a 30% working interest stake in the field in 2018.