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ping mulls restart of production from field off shetland

Ping mulls restart of production from field off Shetland

Ping has acquired the licence containing Hutton as part of an expansion drive under which it has also added stakes in two undeveloped North Sea finds to its portfolio. The company has completed a deal to acquire a controlling interest in the Pilot heavy oil find from Orcadian Energy, which was agreed in December. It acquired an interest in the Glenn find in the latest North Sea licensing round, with the Hutton stake. The company said the moves will allow it to add significant additional resources to its UK North Sea operation “whilst also revitalising the historic Hutton field”. Ping’s parent group, Dagang NeXchange Berhad, sanctioned the expansion despite concern in the North Sea industry that tax changes could make development projects in the area uneconomic. READ MORE: Scottish jobs under threat as oil and gas engineering firms face challenges Labour has threatened a further hike in the rate of the windfall tax that was introduced in May 2022. The term of the Energy Profits Levy was extended in the Spring Budget. Ping said: “The new UK licences will remain in the planning mode for the medium-term while the energy sector seeks further clarity in the coming months over the direction of a potential new fiscal environment.” However, the company added: “We anticipate these projects will potentially come to first oil soon after the projected end of the Energy Profits Levy [in 2029].” Managing Director Zainal Abidin Jalil said Ping was very excited about the licences. “We believe we can use our technical skills from across our expert teams based in Aberdeen and Kuala Lumpur to extract significant value at low cost and very low emissions,” he said. Ping has developed a profitable North Sea business after acquiring control of the Anasuria cluster east of Aberdeen with Malaysia’s Hibiscus Petroleum in 2015. It says Anasuria provides stable positive cash flow and development opportunities. READ MORE: SNP Government must turn grand words about climate into action Ping is working on plans to develop the Avalon field east of Aberdeen. It bought in to the Fyne discovery in November with Hibiscus. Shares in Orcadian Energy surged around 80% yesterday after the company announced that it had completed a deal to sell a controlling stake in the Pilot find to Ping, which could be worth more than $3 million (£2.4m). Pilot is estimated to contain around 80 million barrels of oil. Orcadian chief executive Steve Brown reckons the development of Pilot could help unlock billions of barrels of heavy oil resources held in other discoveries. He said yesterday: “The Pilot development is a fantastic opportunity for our new partners, Ping, the UK oil and gas industry more widely, and of course for Orcadian.” Orcadian has spent years working on plans for Pilot amid turbulent times in the North Sea industry. READ MORE: Failing smart meters scheme subsidises rich amid surge in energy bills The farm-in was approved by directors of Ping’s parent DNeX group at a board meeting held last week. Ping paid Orcadian $100,000 on completion of the deal. It will pay a further $3,000,000 if a field development plan for Pilot is approved by the North Sea regulator. Ping has also agreed to reimburse up to £250,000 past costs incurred by Orcadian. Ping has acquired an 81.25% stake in Pilot and agreed to fund the pre-production work that will be completed if a development is approved, subject to a cap. Orcadian has retained an 18.75% holding in Pilot. The field was discovered by Fina in 1989. Mr Brown founded Orcadian with North Sea veteran Greg Harding in 2014 to apply for the licence containing Pilot. Orcadian has acquired stakes in a range of other North Sea finds. The company floated on the Aim stock market in 2021. Shares in Orcadian closed up 7.25p at 16p yesterday. That left the company with a market capitalisation of around £12m.

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