The last two years have been disastrous for North Sea oil production. With oil prices plummeting, oil and gas majors have reduced or stopped production in the UK North Sea. However, it now looks like this industry may witness a resurgence.
Chrysoar, a fledgling oil and gas contractor, has signed a multi-billion pound deal, making it one of the largest independent oil and gas contractors in the North Sea. The company, which is backed by private equity investors, has bought Royal Dutch Shell’s older oilfields, infrastructure and new developments for £3 billion. Chrysoar stated that it will guide the North Sea oil industry through this difficult global downturn.
Chysoar CEO Philip Kirk said that the industry needs to paint a clear picture of the future, and this will give people optimism, especially after what the oil industry workforce and employees from ancillary services have had to endure in the last couple of years.
However, Chrysoar is not alone in bringing about a change in the North Sea basin. Several smaller oil and gas contractors and companies are buying assets from oil majors. It is anticipated that this change in ownership will help secure the future of the nation’s oil and gas industry for several decades.
EIG Partners, the private equity firm that is backing Chrysoar, is one of the few financiers that are keen on investing in oil and gas projects, particularly those that leading companies are looking to sell and offload. Even Siccar Point, an oil and gas contractor backed by Blackrock, has managed to acquire some of OMV’s North Sea assets for £1 billion.
These new deals are expected to do wonders for the UK’s oil and gas industry. Investors are beginning to realise the potential of the North Sea and are now more willing to invest and enjoy good returns.