Jersey company’s North Sea oil operation could yield $6bn
AN Island business is set for major expansion after commencing work to extract oil worth an estimated $6 billion from the North Sea.
Jersey Oil and Gas has been awarded ownership of an area containing more than 100 million barrels of oil. At current rates, each barrel would be worth around $60.
After being granted the licence to defined areas covering the Buchan and J2 oil fields, around 120 miles north-east of Aberdeen, JOG is aiming to produce the first oil within five years.
The company has also acquired the rights to an adjacent block, estimated to contain a further 14 million barrels, and has an existing stake in the neighbouring Verbier field.
Chief executive officer Andrew Benitz said the recent developments were highly significant for the company.
‘We have been involved in exploration work in the North Sea, but this new licence covers an area that has already been explored and shown to contain and produce oil,’ he said. ‘This is a real game-changer for us and we are actively looking to hire more staff.’
Currently JOG has four staff based at its office in St Helier, including Mr Benitz and co-founder Ron Lansdell, and another eight employees working outside the Island.
‘We aren’t here for tax-led reasons, as we are a UK company with our headquarters in Jersey,’ Mr Benitz said. ‘We are very settled here, and also have quite a few Jersey shareholders. We participate in Island life and work with local suppliers of goods and services wherever possible.
‘This demonstrates the opportunities available to nimble independent companies operating in the North Sea today,’ he added. ‘This is by far the most significant event for JOG since its inception and we are excited to start work on this new project immediately.’
The Buchan field was discovered by BP in 1974 and went into production in 1981. About 148 million barrels of oil have been extracted from it, but production was suspended in 2017 in the wake of a global slump in oil prices. JOG and other players in the oil market have subsequently identified potentially lucrative opportunities to resume work.
JOG is now seeking to complete a development plan for the area, acquired following the annual issuing of licences by the Oil and Gas Authority, a UK government agency. The planning stage is expected to be complete by 2022, with oil flowing by 2024.