Equity Firms Collect Bids for UK's Siccar Point: Press

Private equity firms Blackstone Group and Blue Water Energy have collected final bids from potential buyers for UK operator Siccar Point Energy, Bloomberg reported on January 20 citing sources.

Many of the offers were lower than Siccar Point’s owners had hoped for, and some bidders were only interested in certain assets, sources said.

Among the suitors were UK producer Chrysaor Holdings, Norway’s Equinor, Canada’s Suncor Energy, China’s Cnooc and a private equity firm backed by HitecVision, according to the news agency. HitecVision is a co-owner with Italian Eni of Var Energi, which is buying ExxonMobil's Norwegian upstream assets.

Blackstone and Blue Water set Siccar Point up in 2014 and quickly built up its operations through major acquisitions, including the $1bn takeover of Austrian producer OMV’s UK business in 2016. They began seeking a buyer for the company last year, initially hoping to raise $2-3bn from a sale. They will decide whether to proceed with a deal or put the process on hold after evaluating the bids, Bloomberg sources said.

Siccar Point is involved in six projects in the North Sea and West of the Shetlands including Rosebank, one of the UK’s largest undeveloped fields. It produced 10,406 boe/d in the first half 2019, but aims to ramp output up to 80,000 boe/d by the late 2020s. 

The company is one of  number of firms that were set up with private funds specifically to enter the North Sea during the oil price downturn, develop a portfolio of production and exploration assets and sell for a big profit within five years. While the oil market has improved since then, oil and gas prices have weakened over the last year. And financial investors are less keen now on carbon-intensive energy production. In mid-January, the UK Oil & Gas Authority chairman said that the upstream's licence to operate was at risk.