OKEA responds to market developments

OKEA has confirmed that the Yme redevelopment project in the Norwegian North Sea remains on schedule for first oil in the second half of 2020.

The company said it was working with operator Repsol and the other partners to mitigate the impact which travel and other restrictions caused by the COVID-19 virus may have on the project.

Despite current market conditions, the company stressed it was in a strong financial position with a cash reserve of NOK 1.2 billion (US$102 million).

The operated Draugen oil field in the Norwegian Sea, which provides much of OKEA’s revenues, is said to have a low lifting costs of less than US$20/bbl and is therefore profitable even with the present oil prices.

However, OKEA has decided to postpone all project sanction decisions such as drilling or seismic programme

s and other sanctioned plans where possible, pending agreements with partners. These will likely slash around 90% of the company’s planned exploration expenditure for the rest of the year.

At Draugen, the company has introduced a policy which increases time spent offshore while cutting offshore manning levels from 70 to 37. It is also taking measures to ensure that anyone who has or may have been in contact with someone infected with the virus does not travel offshore.

OKEA’s view is that consolidation of small-medium sized players on the Norwegian shelf is inevitable and the current situation will probably speed up the process.

The company sees itself as in a strong position to take advantage of any opportunities that may arise.

Source: Offshore Magazine