Siccar Point’s $1billion North Sea deal with OMV

Jonathon Roger
Jonathon Roger

A North Sea newcomer made its second move into the basin, snapping up the UK division of OMV in a deal worth up to $1billion (£805.5million).

Siccar Point Energy is buying the UK assets of Austrian company OMV, which includes stakes in several major projects including an 11% share of BP’s Schiehallion redevelopment West of Shetland, which is due to start production next year.

Siccar Point, which acquired a stake in Statoil’s Mariner heavy oil field in August, has been rumoured to have been involved in a number of potential North Sea transactions including assets Shell has been hoping to sell.

The company was set up Jonathan Roger, formerly head of upstream for Centrica, in 2014. He is backed by private equity firms including US giant Blackstone and Blue Water Energy, a smaller London-based investor led by former 3i man, Graeme Sword.

The Vienna-listed OMV said the deal allowed it to “reduce investment requirements” in deep water offshore projects to focus on “low cost regions” instead.

The deal also gives Siccar Point a 20% share of Rosebank, a £6billion project operated by Chevron. The West of Shetland field, which is thought to hold up to 240million barrels of oil, has been put on hold since the oil price collapse.

OMV said Siccar Point would pay it $125million (£100million) when a final investment decision has been reached on Rosebank, on top of the $750million (£603million) agreed for OMV’s other 21 North Sea assets. Another £100million is also to be paid on a “purchase price adjustment”.

Mr Roger, said: “We identified OMV UK as a strategic fit for Siccar Point given the scale, diversity, and quality of its asset portfolio.

“This acquisition turns Siccar Point into a full-cycle oil & gas company with a substantial and high-quality UK North Sea portfolio. We are very excited about this next stage in the company’s growth.”

Mr Sword said: “The combination of OMV UK with Mariner provides Siccar Point with interests in several of the UK’s largest oil & gas fields, with decades of future production.”

He added: “This deal epitomises the vision we all had for Siccar Point back in 2014, and we look forward to continuing our support of the company as it builds on this important step.”

Mustafa Siddiqui, managing director at Blackstone, said: “The combination of low-cost production in the near term from Schiehallion and long-term growth from the development of its other assets is very attractive, especially in the hands of a very capable management team with strong capital backing.”