Taqa’s share of the decommissioning bill for the Greater Brae Area (GBA) has increased by more than $350 million after a licence partner defaulted on its liability.
It follows the recent decision by the industry regulator to green light the transfer of Fujairah Oil and Gas’ stake in the GBA to the remaining joint venture partners.
Energy Voice broke the news towards the end of 2021 that the company was defaulting on its share of the costs of decommissioning the North Sea fields, worth millions of pounds.
Just a year earlier Fujairah, controlled by the namesake emirate of the UAE, had bought stakes in the Taqa-operated licence for just 75 pence.
In its full accounts, the Abu Dhabi headquartered company said: “During 2021, one of the company’s joint venture partners was placed in to default and subsequently had their interests forfeited to the remaining join venture partners.
“Consequently, the obliction to pay the defaulting partners share of the decommissioning liability fell to the remaining partners, with increased liability falling to the company (Taqa) – additional $352m (£326m) decommissioning liability.”
Decom Relief Deed
Taqa won’t have to shell out the full amount though as it is able to claim $121m (£112m) of relief under the Decommissioning Relief Deed.
Enacted by the UK Government, the measure allows companies whose joint venture partners are unable to meet their decommissioning liability to request back some of the cash from His Majesty’s Treasury.
It was also confirmed in Taqa’s accounts that the North Sea Transition Authority (NSTA) gave consent for the handover of Fujirah’s decom liabilities in the Brae Area in July.
They will now transfer to the remaining joint venture partners, with legal completion expected soon.
Less than two years ago, the overall bill for decommissioning the Greater Brae Area (GBA) was listed in court documents at $1.8 billion.
In December 2020, Fujairah bought the stakes of Viaro Energy in the GBA, giving it a 40% stake.
Five months prior to that, Viaro had acquired the GBA interest when it bought North Sea oil and gas producer RockRose Energy in a £250 million deal.
Fujairah held the second-largest stake, 40%, in Brae after operator Taqa, which owns 45.7%.
The remainder is split between Spirit Energy, with 8%, and JX Nippon, the Tokyo-headquartered petroleum company, with 6.3%.
The share of the GBA decom costs to be covered by the two companies is currently unknown.
Taqa said: “During 2021, one of the companies joint venture partners in the Brae area was placed in to default and subsequently had their interests forfeited to the remaining joint venture partners.
“In July 2022, NSTA consent was obtained for the transfer of such forfeited interests and therefore legal completion shall follow in due course.”