Neptune Energy today said it would spend more than $1 billion (£800m) over the next five years to secure energy supplies for the UK and speed the transition to net zero.
CARBON INTENSITY
The company operates around 11% of the country’s gas supply from fields in the UK’s Southern North Sea and the Norwegian North Sea.
Neptune’s carbon intensity of production is 1.7kg CO2/boe, lower than the industry average of 20kg CO2/boe.
SHORT-TERM ENERGY SUPPLY
Following the publication of the Government’s British Energy Security Strategy, Neptune said it would accelerate investment to increase energy supply to the UK.
The company has doubled gas production from its Duva field in Norway to around 13 kboepd, sufficient to supply enough gas to heat an additional 350,000 UK homes.
Neptune will begin infill drilling at Neptune’s operated Cygnus field in the UK next month, with the 10th well due onstream in October.
The company plans for an 11th well to be brought onstream next year, helping to maintain production from Cygnus and offset natural decline.
Neptune added that it could supply more energy if the UK’s Gas Safety Management Regulations were more closely aligned with European standards.
MID-TERM ENERGY SUPPLY
Neptune is investing around $1b with its partners in the new Seagull development (Neptune 35%).
This will add some 50 kboepd of production for the UK from 2023, using existing infrastructure to bring production forward quickly and efficiently.
Neptune will also invest a further $120m with its partners to drill an appraisal well in the second half of this year at the Isabella prospect (Neptune 50%) in the Central North Sea.
Should it prove economic to develop, Neptune and its partners would invest a further $1 billion to bring the development onstream.
LONG-TERM DEVELOPMENT
Neptune will spend around $300m in the next three years developing the Gjøa hub in Norway which exports gas to the UK via St Fergus terminal.
The company has confirmed its interest in the Government’s plans for a new licensing round, focused on Neptune’s existing assets and core areas in the UK North Sea.
Neptune will discuss with the North Sea Transition Authority an application for Pegasus West in the Southern North Sea, which would increase gas production via Cygnus.
The company is also investigating opportunities and future investment in the electrification of Cygnus and in carbon capture storage and hydrogen projects in the North Sea.
UK BENEFITS
Chief executive Pete Jones said that, although the UK represented just 10% of Neptune’s production, it was an important growth area for the company.
“In the last three years, Neptune has spent more than $500 million securing energy supplies for the UK – equivalent to $3 for every $1 Neptune has earned in the UK.
“In addition, the company has spent more than $500 million developing new projects around its Gjøa hub in Norway, which exports gas to the UK via the St Fergus gas terminal.
“Since 2018, it has contributed more than $1.8 billion to UK GDP and supported an average of 3,270 jobs each year.
“For every Neptune employee in the UK in 2021, around 18 jobs were supported elsewhere in the domestic economy.”