Atlantic Petroleum’s boss said yesterday that lower contractor costs and rising oil prices had boosted the prospects of the North Sea Orlando field.
Atlantic chief executive Ben Arabo said the company “believed” in Orlando and thought first oil could be achieved in 2018.
The Faroe-based firm was selected as the new operator of Orlando, and of the Kells licence, at a meeting of the joint operating committee on Friday.
The committee had decided the operatorship should be taken away from Iona Energy, which went into administration about a year ago after failing to restructure its finances.
Mr Arabo confirmed that Iona continued to hold 75% of Orlando, despite still being in administration, while Atlantic holds 25%.
He said the next step for Atlantic was to gain the Oil and Gas Authority’s approval for the switch in operatorship of the assets, located north-east of Shetland.
He also said Atlantic would have to find out “what the plan is” for Iona’s stake in Orlando.
A sale agreement for Iona was put in place earlier this year, but the suitor, Bridge Petroleum, was unable to raise enough funds to complete the deal.
Bridge had also agreed to buy Atlantic’s 25% stake in Orlando, but that sale could not be completed either.
Following news of Bridge’s withdrawal, administrators from FTI Consulting said last month that they were “assessing alternative options” for the sale of Iona.
It is now understood that Iona has entered into exclusivity with major international private equity investors over its sale.
Mr Arabo said yesterday that he was optimistic about Orlando’s prospects in light of recent developments in the market and was keen to get the development back on track.
He said Atlantic was not planning to sell its 25% stake in Orlando as he did not want to stall the project further.
He said: “We like the project. We would not have taken the step (of requesting the operatorship) if we did not believe in the project and think we could take it to first oil.”
“Contractor costs have come down significantly and oil prices are picking up so I think those factors will work in favour of the project.”
He also said the “beauty” of Orlando was that project partners would not have to go back to the drawing board.
“When things stopped last year the work had already progressed significantly,” Mr Arabo said. “We had a field development plan. It has already been approved but has been dormant for a year.
“We want to look at that plan and reactivate it.”