Is the UK North Sea still a region for major foreign investment? China gets to grips with North Sea operators

China stormed into the North Sea oil and gas industry this week as deals worth about £11bn were signed with major players. The deals saw two Chinese state-controlled oil companies take stakes in North Sea operations.  China’s biggest offshore oil producer CNOOC announced a $15.1bn (£9.7bn) deal to take over Canadian rival Nexen. Reported the BBC

If approved, the Chinese would take control of the UK’s largest producing oil field – Buzzard – and the Golden Eagle development, which includes both the Golden Eagle and Peregrine reservoirs in the North Sea, about 43 miles off Aberdeen. The full article can be found here

CNOOC were not the only Chinese company to make significant gains in the region, in the same week SINOPEC announced they’d invested in $1.5billion stake in Talisman Energy’s North Sea operations. A full FT article can be found here

John Manzoni, president and chief executive of Calgary-based Talisman, said the arrangement would create a joint venture more able to invest in improving the output of UK oil assets, while allowing the return of $500m to shareholders through share buybacks.

“Collectively, we will invest more in the UK than Talisman would have on its own,” he said. More information available here

These announcements come not long after the Kuwait state oil firm confirmed a $500million investment in Enquest’s Alma and Galia oil field developments in the North Sea.

Clearly the North Sea, and in particular the UKCS, is a still a region for major foreign investment. A region that for years has been deemed to be on the decline has, in recent months, become a region of opportunity and E&P success.

If you found this interesting  you might also be interested in downloading Alex Kemp’s presentation on investment in the UKCS here

To find out more about this and more please see the Oil & Gas Outlook North Sea conference at: www.terrapinn.com/northsea