United Kingdom – Over the next five years, Neptune Energy will spend more than $1 billion securing energy supplies for the UK and accelerating the transition to net zero.
Neptune currently operates fields in the UK’s Southern North Sea and the Norwegian North Sea, accounting for around 11% of the UK’s gas supply. With a carbon intensity of 1.7 kg CO2/boe compared to the industry average of 20 kg CO2/boe2, it is one of the UK’s lowest carbon producers.
Following the release of the government’s British Energy Security Strategy, Neptune plans to increase investment in the UK’s energy supply.
Short term plans
The company plans to increase gas production from its Duva field in Norway to around 13 kboepd, enough to heat an additional 350,000 homes in the United Kingdom.
Another short-term goal is to start infill drilling at Neptune’s operated Cygnus field in the UK next month, with the 10th well expected to come online in October and plans for an 11th well to come online next year, helping to maintain production and offset natural decline.
In the mid-term, the company plans to invest around $1 billion with its partners in the new Seagull development (Neptune 35 percent), which will add around 50 kboepd of production for the UK starting in 2023, while utilizing existing infrastructure to move production forward quickly and efficiently.
Neptune is also investing an additional $120 million with its partners in the second half of this year to drill an appraisal well at the Isabella prospect (Neptune 50%) in the Central North Sea. If the project proves profitable, Neptune and its partners will invest an additional $1 billion to bring it online.
In the next three years, Neptune plans to invest around $300 million in developing the Gja hub in Norway, which exports gas to the UK via the St Fergus terminal.
The firm has also expressed interest in the UK government’s plans for a new licensing round centered on Neptune’s existing assets and core areas in the UK North Sea.
It is also discussing an application for Pegasus West in the Southern North Sea with the North Sea Transition Authority, which would increase gas production via Cygnus. Neptune is also looking into opportunities for future investment in the electrification of Cygnus, as well as carbon capture, storage, and hydrogen projects in the North Sea, to help the UK meet its net zero goals.
Neptune has spent more than $500 million in the last three years securing energy supplies for the UK, equating to $3 for every $1 earned in the UK. Furthermore, the company has invested more than $500 million in new projects around its Gja hub in Norway, which exports gas to the United Kingdom via the St Fergus gas terminal.
It has contributed over $1.8 billion to UK GDP since 2018 and supported an average of 3,270 jobs per year. Around 18 jobs were supported elsewhere in the domestic economy for every Neptune employee in the UK in 2021.