NEO Energy and Jersey Oil and Gas have announced the selection of a Floating Production Storage and Offloading (FPSO) vessel for the development of the Greater Buchan Area oil field in the North Sea. The project, estimated to cost around $900 million, includes the acquisition of the FPSO. NEO Energy, which recently acquired operatorship from Jersey, made the decision to enhance the redevelopment of the Buchan field.

While the specific FPSO has not been disclosed, NEO and Jersey have agreed on the key commercial terms for the acquisition of an existing FPSO. The choice was driven by the opportunity to reuse existing infrastructure at the Buchan field, and it aligns with the partners' strategy for the project. The Buchan field, situated in the Moray Firth, is a significant pre-final investment decision (pre-FID) undertaking in the UK North Sea, estimated to contain approximately 162 million barrels of oil equivalent.

The selected FPSO can be made "electrification-ready" with limited modifications, enabling its connection to nearby floating wind developments. This feature aligns with the recent INTOG leasing round and presents an opportunity for the Buchan area to benefit from renewable energy sources. The North Sea Transition Authority (NSTA), the industry regulator, has given its approval to the concept selection, confirming there are no objections.

Although NEO and Jersey have not yet disclosed the specific FPSO they are pursuing, the options have narrowed down in recent months. The Voyageur Spirit FPSO, previously docked at Kishorn on Scotland's west coast, has departed for a project in the Middle East. The Hummingbird Spirit FPSO has been renamed "Excalibur" and allocated to the Avalon field by Ping Petroleum. However, the EnQuest Producer FPSO remains docked in the Cromarty Firth, in close proximity to the Buchan site, making it a potential candidate.

With the identification of the Buchan area solution, engineering studies are progressing as part of the preparation for the development plan, which is expected to be submitted in 2024. NEO Energy will assess and refine the estimated $900 million gross cost during the Front End Engineering and Design (FEED) phase and contract tendering, ensuring a robust field development plan is finalized.

Jersey CEO Andrew Benitz expressed his enthusiasm for finalizing the Greater Buchan Area (GBA) development solution and securing an FPSO for redeployment on the Buchan field. Benitz highlighted the project's potential to minimize carbon emissions and participate in the offshore electrification plans of the UK oil and gas industry. The partnership between Jersey and NEO Energy will continue as they work together on the Buchan field's overall re-development plan, which is anticipated to be submitted to the NSTA in the first half of 2024.

Buchan, which commenced production in 1981, experienced a halt in operations in 2017 due to safety concerns surrounding the Buchan Alpha platform, leading to its removal by the then-operator Repsol Sinopec. Jersey has been actively developing plans for the area, and they extended their development timeline in late 2021 to accommodate further studies on electrification. Last month, Jersey completed the farm-out of 50% ownership and operatorship of Buchan to NEO Energy, the fifth-largest producer in the UK. As part of the agreement, Jersey's share of carry costs is limited to 12.5%. Additionally, Jersey announced an extension granted by the NSTA for the Verbier discovery license P2170, which is part of the Greater Buchan Area plan. The three-year extension covers the license until August 29, 2026. Production startup from the Buchan field is targeted for 2026.