UK-listed Jersey Oil & Gas (JOG) has consolidated its interest in the Greater Buchan Area (GBA) in the central North Sea after striking a deal to acquire Itochu-owned partner Cieco V&C.

The deal gives JOG an additional 12% working interest in licence P2170, taking its ownership interest in the GBA to 100%.

JOG will pay an initial £150,000 ($200,000) in cash and make contingent payments of £1.5 million once a field development plan for the Verbier discovery is approved by the UK authorities.

It will also make a £1 million cash payment not later than one year after first oil.

JOG chief executive Andrew Benitz said: "The corporate acquisition of Cieco V&C completes 100% ownership of the final component of our GBA project that was not previously wholly owned by JOG and positions us perfectly ahead of completion of concept select and the planned launch of JOG's wider GBA sales process.”

Benitz said the acquisition “increases JOG's discovered resources, adds material value and exploration upside in addition to useful tax losses”.

Prior to the deal JOG owned a 100% working interests in the blocks that contain the Buchan oilfield and J2 and Glenn oil discoveries, and an 88% working interest in the blocks that contain the Verbier oil discovery and other exploration prospects.

JOG revealed to Upstream earlier this year it was exploring the possibility of powering the facility with electricity generated onshore.

There is also the potential for the GBA to act as a power hub, enabling the wider electrification of third-party infrastructure in the Outer Moray Firth.

The Buchan field, around 120 kilometres offshore in the Outer Moray Firth, was discovered in the early 1970s by BP and started production in the early 1980s.

About 148 million barrels of oil have been extracted so far, but production was suspended in 2017 when the previous production facility, the old Buchan Alpha floating production unit, failed its safety case and was decommissioned.

Soon after, then-operator Repsol Sinopec Resources UK relinquished its licences, which the OGA offered to industry.

Jersey estimates that more than 80 million barrels of recoverable oil volumes remain to be produced from the field.

David round, analyst at BMO Captial Markets, said in a note to clients: "Assuming Verbier is developed in future this deal could prove to be valuable bolt-on for Jersey.

"Regardless, consideration is small, so it shouldn't put additional stress on the balance sheet and importantly it tidies up the licence ownership across the Greater Buchan Area ahead of the planned farm-out process."

Field Development

Jersey Oil & Gas consolidates ownership at North Sea asset