The boss of North Sea oil producer EnQuest said yesterday he believed the region could yield further discoveries to extend its lifespan.
Chief executive Amjad Bseisu highlighted last year’s Glendronach gas find by Total – which could pump out the equivalent of about 180 million barrels of oil – as an example of why the industry should not give up on the search for new reserves.
EnQuest is production and development, rather than exploration focused, but Mr Bseisu said it was likely there were “a lot of discoveries waiting to be found” in UK waters.
He was speaking after EnQuest announced a return to the black during 2018, along with a big jump in production from its North Sea and Malaysian operations.
Alongside him was EnQuest North Sea managing director Bob Davenport, who said he was confident the firm could tackle production issues on its Kraken floating production, storage and offloading (FPSO) vessel following a series of outages and weather-related disruption to the flow of oil.
Kraken represents about one-third of EnQuest’s production, and Mr Davenport said the company was working hard to improve “uptime and efficiency” on the FPSO. “We achieved some performance improvements in the first couple of months of this year, he added.
Cairn Energy, which holds a 29.5% stake in the EnQuest-operated asset, recently revealed it had booked impairment costs of £125 million due to lower-than-expected production on Kraken.
EnQuest is hoping to get Kraken’s production performance up to speed with other assets, allowing it to ramp up total output during 2019.
It is also focused on keeping production operating costs low – they are currently $23 a barrel – and improving its net debt to earnings ratio.
Net debt stood at £1.36 billion at the end of last year, down from £1.53bn a year earlier.
Mr Bseisu said the firm aimed to cut the ratio of debt to earnings before interest, tax, depreciation and amortisation to a multiple of two by the end of 2019.