With Suncor (NYSE: SU) and ONE-Dyas looking to sell off their UK portfolios, analyst firm Welligence has suggested the Buzzard hub may be an “appealing proposition” for a raft of key buyers.
Harbour Energy (LON: HBR), NEO Energy (NASDAQ: NEO) and Waldorf Production could all be interested in the stakes, according to the firm, with further potential from CNOOC itself, which earlier this year reported to be seeking a sale.
With Suncor and ONE-Dyas owning 35.1% interest in the Buzzard field in the Moray Firth and the field’s operator CNOOC owning a further 43.2% stake, 78.3% of ownership could be available.
The Moray Firth-based field produced 77,740 barrels of oil equivalent per day (boe/d), 86% of which was oil, in H1 2022.
Declining production volumes means the current emissions intensity of 17 kgCO2e/boe is set to rise to 27 kgCO2e/boe by 2030.
However, CNOOC studies on electrifying the field using offshore wind have shown that reducing Buzzard’s emissions profile is possible.
Reducing or completely eliminating flaring from the platform also has a major impact on Buzzard’s emissions, yielding similar results as a 30% electrification case until the next decade.
Suncor and ONE-Dyas sales process
Suncor and ONE-Dyas both announced this year that they plan to sell UK assets.
Earlier this month Suncor sold its Norwegian assets to Sval Energi and are now looking to sell its UK business as it looks to pull back from the North Sea.
The Canadian group said that based on interest in its UK assets, it has “commenced a sale process for its entire UK E&P portfolio”, though it did not disclose a deal value or name any potential buyers.
In addition to the company’s 29.9% interest in the Buzzard field, it also has a 40% stake in the pre-final investment decision (FID) Rosebank development.
As for ONE-Dyas, In February this year, the company entered talks with Waldorf Production to sell assets.
Last year the Dutch oil and gas company began the process of offering assets in the North Sea.
In March of this year, Chinese firm CNOOC drafted in the Bank of America to sell its UK assets (including the Buzzard field).
With this, rumours of the company withdrawing from oilfield investments in the UK North Sea began to spread, however, CNOOC denied this.
Xie Weizhi, CNOOC’s chief financial officer, told reporters at a quarterly earnings call that the company has “no plan to exit from any particular region.” All of CNOOC’s overseas projects are operating smoothly, he said, and the company has felt no impact from the Russia-Ukraine war or any related sanctions, reported the Nikkei.
Buzzard emissions and electrification
Last month it was reported that a contract worth over £25 million was being put together to gauge the current state of the offshore cabling market, with a view to reducing emissions from the Buzzard field.
Buzzard has a base load of 70 megawatts (MW), but the company is looking at the potential of using the complex to supply power to other assets.
Under that scenario, the base load of the field could increase to 300MW.
CNOOC is currently engaged in a request for information questionnaire for electrifying Buzzard, located around 62 miles north-east of Aberdeen.
In December last year, CNOOC announced it had teamed up with Kincardine operators, Flotation Energy, to develop the Green Volt offshore wind farm.
This deal would see up to 30 floating turbines, located on a brownfield site around 46 miles off Aberdeenshire, would supply power to Buzzard and the National Grid.