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Oilexco boss enters bid for ONS assets

Oilexco boss enters  bid for ONS assets
The chief executive of Canadian oil company Oilexco was yesterday said to be bidding for some of the assets of its subsidiary, Oilexco North Sea (ONS), which went into administration last month.

The chief executive of Canadian oil company Oilexco was yesterday said to be bidding for some of the assets of its subsidiary, Oilexco North Sea (ONS), which went into administration last month.

Arthur Millholland was reported to have tabled a bid to take over nine of the company’s fields for no upfront cost and the assumption of about £49million worth of liabilities.

A Sunday newspaper also said five bidders had made offers for different parts of ONS, and that final bids were due on Friday, March 6.

Administrators at Ernst & Young (E&Y) have already said many parties are interested in acquiring ONS and its assets.

Rivals BG Group, Talisman Energy, Petro-Canada and Maersk Oil have all been linked in the media with possible bids.

Other interested companies could include Abu Dhabi national energy company TAQA.

Oilexco announced on Hogmanay that ONS intended to file petitions for administration “as soon as reasonably practicable”. The group said it had run out of options for ONS after bankers refused to provide further funding.

It has been reported that ONS has more than £1billion in debt and contract payments outstanding.

E&Y was appointed as administrator on Wednesday, January 7.

The news left a questionmark over the future of about 100 ONS staff in Aberdeen and offshore.

E&Y said at the time of its appointment that ONS was an important operator of several fields in the North Sea, including Brenda and Nicol.

It added: “The company began experiencing difficulties in mid-2008 in raising finance to continue its planned drilling and development programme and in recent months a strategic review was undertaken, leading to buyers being sought for the business. The company currently produces around 16,000 barrels of oil per day and is on the verge of producing oil from the Shelley field which, along with other current drilling activity, is expected to result in total production of over 30,000 barrels per day.”

The problems at ONS follow warnings from industry experts that some smaller firms operating in the North Sea could become casualties of the global recession as funding dries up.

ONS activities are focused on the outer Moray Firth and central Graben areas of the North Sea.

Production assets also include the Janice/James and Balmoral/Stirling/Glamis fields, Nelson field and platform, and the Balmoral floating production vessel.

Discoveries include Black Horse, Bugle, Huntington, Kildare, Ptarmigan, Shelley and Sheryl.

ONS also has exploration acreage interests in Alpha/Delta, Bluebell, Caledonia, Catcher, Constance, Danica, Halibut North, Laurel Valley, Mallory, Manhattan, Moth, Oddjob, Sparrow and West Athena.

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