Serica, BG drop swap of UK North Sea interests

Serica Energy PLC and BG Group PLC have cancelled their plans to trade equal interests in two adjacent blocks they operate separately in the North Sea.

Uchenna Izundu
International Editor

LONDON, June 25 -- Serica Energy PLC and BG Group PLC have cancelled their plans to trade equal interests in two adjacent blocks they operate separately in the North Sea.

Serica will retain its 50% interest in Block 23/16f in the UK North Sea instead of trading 25% of its interest for the same amount in adjacent Block 23/21, operated by BG Group PLC.

Serica originally was interested in picking up 25% in BG's Block 23/21 to gain access to the potential extension of the Columbus gas-condensate discovery and have BG contribute to well costs (OGJ Online, Nov. 17, 2006).

The deal was subject to approval from regulators and the partners of the licenses that contain the blocks, but the companies said the complexity in securing interests from the other owners proved too difficult.

Serica said they were coming closer to appraisal drilling on Columbus, and, in effect, would have had to carry BG.

Developing Columbus is a high priority for Serica, the company said. The discovery holds about 21.6 million boe, half of which is attributable to Serica's 50% interest, according to a report by RPS Energy Ltd.

Serica has secured the Sedco 704 semisubmersible to drill 1-2 appraisal wells in Columbus field in the third quarter.

Serica told OGJ that it has spoken to BP PLC, Total SA, and Royal Dutch Shell PLC, all of which have shown a willingness to carry Columbus gas and condensate through their infrastructure.

Columbus has a gross gas column of at least 125 ft in Palaeocene Forties sandstone. The company tested 85 ft of the reservoir and produced 17.5 MMcfd of gas and 1,060 b/d of 47.5° gravity condensate during a 5-hr period. The gas and condensate was produced from a 56/64-in. choke.

Serica's partners in Block 23/16f are Endeavour Energy UK Ltd. and EOG Resources UK Ltd., each holding 25%.

Contact Uchenna Izundu at uchennai@pennwell.com.

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