Chevron receives off er for its Rosebank fi eld stake in North Sea

Chevron Corp has re- ceived an off er for its stake in the Rose- bank project in the North Sea, months after the company said it plans to exit some fi elds in the UK. The oil major has a 40% stake and is the operator of the Rosebank fi eld, located west of Shetlands in one of the harshest and most expensive areas of the North Sea. Chevron has strug- gled to reach a fi nal investment decision for the project since at least 2013, right before an oil- price collapse caused compa- nies to slash spending. Chevron and other big oil companies including Cono- coPhillips are reducing their in- terests in the ageing North Sea as they focus on growth regions like US shale. The UK is likely to have the fewest new wells this year since 1973, according to a trade group. The government, keen to keep production going in the region, has encouraged private equity companies to fi ll the gap left by the oil majors. “Chevron has been weighing up development options for a number of years,” Ross Cas- sidy, a senior research manager at consultant Wood Mackenzie Ltd, said in a statement.

“The asset may be struggling to compete for capital with- in Chevron’s low-breakeven tight-oil portfolio, focused on the US Permian basin.” News of the talks for Rose- bank was fi rst reported by industry trade publications, which didn’t name the poten- tial buyer. A spokeswoman for Chevron confi rmed the off er, without giving more details. The San Ramon, California- based company is still working on engineering and design for the project, she said. Chevron said in July it in- tends to dispose its assets in the central North Sea after an internal strategic review. That didn’t include Rosebank. The fi eld is the largest unde- veloped asset in the North Sea, according to Wood Mackenzie. Suncor Energy Inc holds 40% in the project and Siccar Point Energy 20%. Rosebank will probably need about $6bn to develop, accord- ing to Cassidy. If it gets the green light in 2019, oil produc- tion could start in 2024, with output rising to about 100,000 barrels of oil equivalent a day at a peak rate, he said. Development would prob- ably include a new-build, harsh environment fl oating produc- tion, storage and offl oading vessel and up to 20 production wells, Cassidy said.