Plans for one of the largest undeveloped fields in the UK North Sea are on ice due to the coronavirus pandemic.
Siccar Point Energy and joint venture partner Shell UK had hoped to make a final investment decision (FID) on developing Cambo, about 78 miles north-west of Shetland, later this year.
But Aberdeen-based Siccar said yesterday the “unprecedented worldwide macroeconomic dislocation” of Covid-19 had pushed back the FID target to the second half of 2021.
Cambo has an estimated 900 million barrels of oil in place, with a first development phase targeting 150m of them via a floating production, storage and offloading vessel.
It was expected to be one of the largest new field developments in the UK to get off the ground this year.
Siccar chief executive Jonathan Roger said that it “makes sense” to hold off until normality resumes.
He added: “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 (Organisation for Economic Co-operation and Development) 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.
“We will continue to mature key aspects of the project to facilitate a swift and efficient ramp-up when market conditions stabilise.”
Siccar said it would continue to work with the existing supply chain to “ready the project” for FID next year, subject to approval of a licence extension request to the Oil and Gas Authority.
Mr Roger added: “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.”
US company Hess made the Cambo discovery in 2002. Siccar acquired the asset from Austrian company OMV in 2017 and now has a 70% operated stake, with Shell owning the remaining 30%.
Private equity-backed Siccar – launched in 2014 – also has interests in the Mariner, Rosebank and Schiehallion fields, the first two operated by Equinor and the latter by BP.