North Sea operator Ithaca Energy is understood to have paused its efforts to electrify assets west of Shetland.
The independent player wholly owns the Cambo oilfield and a stake in Equinor’s newly approved Rosebank development, the two largest untapped finds in UK waters.
Sources have told Energy Voice, sister website to The Press and Journal, that Aberdeen-based Ithaca is no longer participating alongside BP and Equinor in a west of Shetland electrification team.
And neither is it contributing resources, they said.
Firms signed joint pledge to electrify Cambo, Rosebank and Clair
Wider efforts to electrify assets west of Shetland continue.
Ithaca signed an agreement with BP and Equinor in December to work towards electrification of assets including Cambo, Rosebank and BP’s Clair field.
It is understood the west of Shetland electrification team will continue to keep Cambo in mind, leaving the door is open for Ithaca to return to the table at a later stage.
London-listed Ithaca recently became 100% owner of the Cambo oilfield after Shell exited the project, and it is now on the hunt for partners.
A spokesperson for the electrification group said it “continues to evaluate low-carbon power hub solutions to recommend a technically and commercially viable option to support decarbonisation west of Shetland”.
Ithaca declined to comment.
The electrification challenge
Electrification is a process of powering offshore installations with electricity, rather than diesel or gas generators – which are the main pollutants offshore.
Ithaca’s move comes amid a series of challenges for offshore electrification across the UK oil and gas sector, including its technical complexity, an uncertain tax regime and other prominent issues like securing grid connections.
On Wednesday, Equinor said 2030 is the “earliest” Rosebank will benefit from the emissions-busting technology – years after first oil is achieved.
David Moseley, vice-president for North Sea research at market inteligence firm Welligence Energy Analytics said pausing electrification efforts would be logical for Ithaca.
He added: “Options to… rejoin or benefit from the scheme later, when the development of Cambo is further progressed, mean on paper at least Ithaca appears to lose little in the short term through temporarily opting out.
“Timing-wise, the Cambo development remains up in the air, and so the latest announcement does not materially impact what were already quite vague timescales.
“Electrification will likely play second fiddle to seeking a partner and receiving regulatory approval, arguably two of Cambo’s biggest hurdles to development.”