NORTH SEA energy firm Parkmead Group has pulled the plug on its flagship Greater Perth Area (GPA) project.
Executive chairman Tom Cross said he and his team at the Aberdeen business were “naturally disappointed”.
The GPA is estimated to contain about 55million barrels of recoverable oil equivalent, making it one of the UK North Sea’s largest undeveloped areas.
It includes the Perth and Dolphin discoveries in the central North Sea.
The Press & Journal says Parkmead has been working up plans for the area for years.
It had recently focused on net-zero production through a tie-back to the Scott facility six miles away.
Development costs for the project, including the extra expense of achieving net-zero requirements, had soared to nearly $1billion (about £780million).
In a strategy update yesterday, Parkmead insisted its “technically sound” development could have added “significant” oil volumes for the UK.
It would have helped to deliver maximum economic recovery from the North Sea – in line with government policy – as well as energy security for the UK, the company said.
And it attracted farm-in interest from “multiple parties”, Parkmead added.
But the firm highlighted ongoing concerns over the longevity of nearby infrastructure.
And it went on to blame much-higher North Sea taxes, following the introduction of the windfall tax on the industry last year, for its decision to walk away from developing the GPA.
This tax environment “materially damages” project economics, Parkmead said.
The business will book a £33million “non-cash” write-down down for the abandoned project in its next results.
Investors reacted badly to the news, with the firm’s shares plunging by more than 20% to 14.5p.
