Amerada Hess Ltd. (AHL) has purchased Unocal U.K. Ltd. assets for "nominal consideration" as Unocal Corp. continues to restructure its worldwide exploration and production interests to focus on cash generation.
The deal brought AHL 80% of the U.K. offshore exploration acreage of Unocal, consisting of 21 North Sea blocks, 18 of which will be operated by AHL.
Although Unocal discussed a sale with oil companies, AHL eventually bought the assets because some licenses fitted well with its current exploration interests.
In particular, AHL was interested in Unocal's:
- Block 14/30b west of Scott field, which AHL believes holds further prospects.
- Block 20/5c operated by AHL and near Buchan field;
- Blocks 23/16c, 23/16d, and 23/17 north of Lomond field along the U.K.Norway boundary.
The Unocal acreage also covers 11th round Blocks 3/13b and 3/18b, which AHL bid for. They lie near a Total Oil Marine plc stronghold, which includes North Alwyn field and the Dunbar satellite prospect.
Blocks 3/13b and 3/18b also lie on or near a possible export route for Total's Northern Underwater Gas Gathering Export and Treatment System (Nuggets) project. Nuggets involves four gas fields that could not be viably developed separately.
Total is leading a joint study involving Shell U.K. Ltd., Esso U.K. plc, Mobil North Sea Ltd., and Elf Petroleum U.K. plc, each of which holds interests in one or more of the Nuggets fields. A project agreement is expected this year.
Unocal's remaining exploration and production assets in the U.K. North Sea will be transferred to separate subsidiaries of Unocal International Corp.
A Unocal spokesman said the sale to AHL follows Unocal's decision to focus its exploration program because its exploration budget has been reduced. The U.K. tax regime made its British assets a noncore area.
In the short term, Unocal is concentrating on U.S. prospects, along with acreage in Indonesia and Thailand and its share in the Azeri field project in Azerbaijan.
Unocal will retain its 31.25% interest in Heather field, which it operates. Heather, in U.K. North Sea Block 2/5, produces about 9,000 b/d of oil.
The company also will retain its 12.5% share in Nevis field, a possible candidate for development in Block 9/12a. Nevis reserves are estimated at 5 million bbl of oil and 19 bcf of gas.
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