Petroleum Africa
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Friday, June 23, 2023
Eni S.p.A. announced that along with Vår Energi it has reached an agreement to acquire Neptune Energy Group Limited, a leading independent exploration and production company with a world-class portfolio of gas-oriented assets and operations in Western Europe, North Africa, Indonesia and Australia.
The portfolio is competitive in terms of cost and low in operational emissions. Eni will acquire assets comprising Neptune’s entire portfolio other than its operations in Germany and Norway. The German operations will be carved out prior to the Eni transaction and the Norwegian operations will be acquired by Vår directly from Neptune under a separate share purchase agreement.
Overview of portfolio acquired
– UK: In 2022 Neptune produced 15kboed, of which most relates to gas production from its operated and long-life Cygnus field, the UK’s largest single gas producer. Additionally, Neptune is currently developing the operated Seagull field which is due to come onstream in 2H 2023. In 2022, Eni produced 44kboed in the UK mainly from the non-operated Elgin Franklin and J-Block.
– Netherlands: In 2022 Neptune produced 18kboed, of which most relates to gas production. Neptune is the largest producer in the Dutch North Sea and operates several key offshore hubs which provide opportunity to efficiently add new reserves and production through infill drill and tiebacks. Eni does not have E&P operations in the Netherlands but the additional source of gas supply will improve the geographical and pipe versus LNG diversification of our well established and successful midstream gas GGP operations.
– Algeria (and Egypt): Neptune operates the Touat field in Algeria. Touat production is currently suspended but will restart once upgrades to the processing facilities are complete with plateau production at 100% of over 400Mscfd (~70kboed). Neptune production from the Western Desert in Egypt in 2022 was 3kboed. In 2022, Eni produced 95kboed in Algeria and 346kboed in Egypt. In the context of the war in Ukraine, Algeria has become a key supplier of gas to Europe. Eni, as the leading IOC in the country, has taken a leading role in this initiative and expects 2023 production will average more than 120kboed in the country.
– Indonesia: Neptune production in Indonesia of over 20kboed came from the Eni operated Jangkrik and Merakes fields which supply gas to the Bontang LNG facility and domestic customers. Eni production in 2022 was 62kboed.
– Australia: Neptune maintains an interest in the Petrel project in the Bonaparte Basin, offshore Australia. Though development options for Petrel are currently being assessed, there could be optionality to leverage existing infrastructure including the Eni (100%) Blacktip field which produces and processes gas offshore for delivery to shore.
Neptune Norway Business: In 2022 the Neptune Norway Business accounted for 58kboed of low cost and low emission production, of which 57% was gas or LNG. Neptune’s principal assets in the country are Snøhvit, Njord, Gudrun, Fenja, Duva, Gjøa and Fram of which Fenja, Duva and Gjøa are operated. In 2022, Neptune completed development activities on Njord and Fenja, with both expected to contribute to production growth this year. Future growth is expected to be driven by a number of short-cycle tie-back opportunities to existing infrastructure. In 2022, Vår produced 220kboed. The combination in Norway brings together two high performing organisations with extensive experience in exploration and project development and significant opportunities to create additional value while reducing emissions.
Low carbon: The Neptune portfolio production in 2022 was comprised of 77% gas[3]. The Scope 1 & 2 carbon intensity of operated production in 2022 was 5.9 kgCO2eq/boe3
CCUS opportunities: Neptune is advancing CCS projects in Norway, the Netherlands and the UK with FEED at the L10 project in the Netherlands expected to commence this year. Eni regards CCS as a key lever in its decarbonization strategy targeting a gross capacity of 30Mtpa by 2030. Ravenna CCS is expected to start up in 2024 and HyNet in the UK is advancing as one of two ‘Track 1’ projects. Eni is also working on the Bacton CCS project in the UK, Bahr Essalam in Libya and other projects in Egypt, Australia and the UAE.
Visit Eni here for more details in the full release.
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