Canadian oil and gas firm Talisman Energy said yesterday it was on track to finalise a deal over its UK North Sea assets with China’s Sinopec by the year-end.
The transaction, expected to bring increased investment into the region, will see Sinopec pay £956million for a 49% stake in Talisman’s UK North Sea business, creating a new joint-venture company.
Talisman, announcing its third-quarter results yesterday, said the boost in investment would fund infill drilling and major projects plus improvements in day-to-day running.
It follows the approval last week by the UK Government of a £1.6billion investment by Talisman in its central North Sea Montrose area redevelopment and the firm also picking up five exploration licences in UK waters.
Talisman Energy (UK) senior vice-president Geoff Holmes said the last quarter had seen some exciting and important new developments for the business. He added: “We were delighted to have been offered five new licences comprising interests in . . . nine blocks or partial blocks in the Department of Energy and Climate Change’s 27th offshore oil and gas licensing round last week.
“Securing these licences coupled with investment in our £1.6billion Montrose area redevelopment project reinforces our commitment to the UK continental shelf as an oil and gas producing province.”
He said the fourth quarter would see the firm focus on creating the joint venture with Sinopec.
Globally, Talisman said its overall spending in 2013 would be smaller and more focused than in recent years, at £1.87billion. Third-quarter revenue was down to £1.06billion compared with £1.2billion in the same period last year, despite a 6% increase in underlying production to 415,000 barrels of oil equivalent.
The firm also suffered a net loss of £455million in the quarter it said as a result of ongoing issues over its Yme platform off Norway, declining production on its Norwegian Rev field, a decision to pull out of Peru and prohibitions on shale-gas operations in Quebec, Canada.