SICCAR Point Energy today announced it is to defer approval of its Cambo field project until next year due to the coronvirus outbreak.
Along with partner Shell, Siccar said the “unprecedented worldwide macroeconomic dislocation” of covid-19 means it has to delay a final investment decision (FID), which was expected in the third quarter of this year.
The West of Shetland project was expected to be one of the largest new field developments to be given the greenlight in 2020 for the UK sector.
However, Siccar Point Energy chief executive Jonathan Roger, said: “Cambo remains an extremely attractive development with compelling economics. However, given the uncertainty of the global situation, including whether any people, goods and services can be mobilised in OECD countries, it makes sense to hold-off final approval until some normality returns to the market and a clear and robust path forward can again be established.
“In the meantime, Siccar Point is very well positioned with respect to this downturn having both substantial cash balances and very full hedging for 2020 and 2021. During the period of delay, we will continue to mature key aspects of the project to facilitate a swift and efficient ramp-up when market conditions stabilise.”
The Cambo field, located 125km northwest of the Shetland Islands and in a water depth of 1100m, was discovered in 2002, and subsequently had 4 appraisal wells drilled up to 2012 and a final successful appraisal well was drilled and flow tested by Siccar Point during the summer of 2018.
It has an estimated 900million barrels of oil in place, with the first phase 150m barrels via a floating production, storage and offloading (FPSO) vessel.