Alpha Petroleum is expected to make a decision this quarter on whether to sanction its Cheviot field in the North Sea, according to contractor Teekay.
The floating production firm said Alpha Petroleum is attempting to complete the financing for developing the field, which is considered one of the region’s largest untapped discoveries.
Teekay has an agreement to deploy the Petrojarl Varg FPSO to the Northern North Sea field if it is sanctioned.
A decision is expected in Q2 this year, according to Teekay.
Cheviot, which lies east of Shetland, is 100% owned by Alpha and is expected to produce at least 30,000 barrels of oil equivalent per day.
First oil is currently slated for the second quarter of 2021.
Cheviot holds an estimated 55million barrels of oil and 120billion cubic feet of gas.
Alpha said it is also looking to use the facility as a hub for other nearby discoveries and prospects with an unrisked potential of 400million barrels of oil equivalent.
In October, engineering firm Sembcorp Marine signed a £125million deal to refurbish the FPSO ahead of its posting to Cheviot, with work expected to be completed in July 2020.
Teekay CEO Ingvild Saether said: “We continue to work closely with Alpha Petroleum in their attempt to complete the financing of the development of the U.K. Cheviot field which remains a pre-condition to effect the new charter contract for the redeployment of the Petrojarl Varg FPSO.
“We expect a decision to be made in the second quarter of 2019.”
Private equity-backed Alpha is based in Surrey and entered the North Sea as an operator in 2001.