Neptune Energy to inject more than $1bn into North Sea activities
Neptune Energy plans to spend $1bn over the next five years in supporting UK energy security and accelerating the country's transition to net zero, the company said on May 10.
Neptune said the $1bn investment plan was in line with the UK's new energy security policy. The guidelines, published last month, reaffirmed gas as an anchor for the stability of the UK energy system, while also stressed the need for increased wind, solar, hydrogen and nuclear capacity.
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Neptune currently serves around 11% of the UK's gas supply from a portfolio which straddles the Norwegian and UK sectors. Its carbon intensity, of around 1.7kg CO2, significantly outperforms the global industry average of 20kg CO2, Neptune estimates, meaning it is well placed to support Whitehall's carbon neutrality commitments.
Around $300mn of the $1bn budget has been allocated to strengthen Neptune's Norwegian processing hub, situated at the Gjoa field. Gjoa is responsible for exporting Norwegian gas to the UK's St Fergus receiving terminal. Gas production at Duva, Neptune's earliest Norwegian discovery, is set to be doubled to 13,000 boe/d, providing enough supply to heat 350,000 households.
In the UK, Neptune confirmed its interest in the next upstream licensing round, due to be held this autumn. Its ageing Cygnus gas field in southern UK North Sea waters is receiving investment to support yields into the long term, and UK regulators are currently considering an application for Neptune to acquire nearby Pegasus West, which could potentially tie into Cygnus's existing infrastructure.
There are plans for two in-fill wells at the core Cygnus deposit, with the first well due to commence next month. Neptune said it was investing around $1bn with its partners at Seagull oil field in the central UK North Sea to boost output by 50,000 boe/d from 2023 onwards. A further $120mn will be spent later this year on an appraisal well at the Isabella oil and gas prospect, situated in licence P1820, in which Neptune holds 50% non-operated interest.
Over the past three years, Neptune has invested more than $500mn in its UK-facing oil and gas portfolio. It claims it could supply "even more energy" if the UK's gas safety management regulations were updated, in order to mirror more closely provisions outlined under continental European standards.