Draft:NEO Energy

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NEO Energy, short for New European Offshore, is a UK-based offshore oil and gas company operating on the UK Continental Shelf (UKCS) in the North Sea. It was founded in July 2019 and is backed by the Norwegian private equity firm HitecVision, which merged it with Verus Petroleum, another of its UKCS oil and gas producers, in October that year. [1][2] NEO Energy produced 80,999 barrels of oil equivalent per day in 2022.[3] NEO Energy has been described as part of a group of new entrants to the UK offshore industry following the 2014 price crash, with others including Neptune Energy, Harbour Energy’s Chrysaor, Zennor Petroleum, and Ithaca Energy-owned Siccar Point Energy.[4]

Acquisitions[edit]

HitecVision’s North Sea Opportunity Fund[5] reportedly taps US capital for investments in UK and Norwegian offshore operations.[6] Prior to 2021, the private equity firm developed a $2 billion loan facility secured against its undeveloped reserves.[7]

The company acquired some of Total UK’s North Sea assets in August 2020.[8] It completed an acquisition of Zennor Petroleum on 12 July 2021 for up to $625 million.[9] On 9 December 2021, it acquired a portfolio of ExxonMobil assets for more than $1 billion.[10][11][12]

On 30 March 2022, it acquired JX Nippon Exploration and Production (U.K.) Limited for $1.66 billion.[13][14][15] In October 2022, it acquired a 45 percent stake in the North Sea Isolde prospect from Equinor.[16] In November 2023, it was announced that NEO would acquire the ‘Western Isles’ floating production storage and offloading vessel from Dana Petroleum for an undisclosed amount.[17]

Operations[edit]

In 2023, NEO Energy was the sixth-largest oil producer in the North Sea.[18] On 31 January 2024, the UK’s North Sea Transition Authority announced the company would be awarded licenses in the second tranche of the 33rd licensing round.[19][20] On 3 May 2024, NEO was allocated two blocks in the third tranche of the round.[21]

Controversies[edit]

The North Sea Transition Authority fined NEO £100,000 in April 2024 for venting more than four times its permitted quantity of gas for the calendar year 2022.[22][23] The company was originally granted 1.035 tons of venting per day, equivalent to just under 378 tons per year, for the Donan, Lochranza, and Balloch fields combined. However, when it identified the issue on 1 November on 2022, it had already exceeded the venting consent by approximately 1,200 tons through cold flaring. The NSTA said NEO had incorrectly allocated its permitted quantity of venting, or the controlled release of hydrocarbon-containing gases into the atmosphere, to its consent for flaring.

References[edit]

  1. ^ "The new North Sea players riding the wake of the retreating majors". Financial Times. Retrieved 3 May 2024.
  2. ^ "North Sea producers warn windfall tax has forced rethink of UK projects". Financial Times. 16 June 2022. Retrieved 7 May 2024.
  3. ^ "Profits and production surge at UK producer NEO Energy". Energy Voice. 2 October 2023. Retrieved 3 May 2024.
  4. ^ Bridge, Gavin; Dodge, Alexander (2022). "Regional assets and network switching: shifting geographies of ownership, control and capital in UK offshore oil". Cambridge Journal of Regions, Economy and Society. 15 (2): 367–388. doi:10.1093/cjres/rsac016.
  5. ^ "HitecVision North Sea Opportunity Fund, L.P. - GFSC". Retrieved 10 May 2024.
  6. ^ Bridge & Dodge, ‘Regional assets and network switching’, p.383.
  7. ^ Presentation by Knight, J. (2021): ‘Transforming the oil and gas industry’. Presentation at ‘Industry in Transition: driving a Net Zero Energy Future’, OGUK Conference (online), 1st June 2021. Cited in Bridge & Dodge, ‘Regional assets and network switching’, p.383.
  8. ^ "NEO Energy acquires Total's UK North Sea fields". Offshore Technology. 4 August 2020. Retrieved 3 May 2024.
  9. ^ "Cairn sells UK assets in further changing of the North Sea guard". Financial Times. 9 March 2021. Retrieved 7 May 2024.
  10. ^ "Exxon offloads North Sea assets". Financial Times. 24 February 2021. Retrieved 7 May 2024.
  11. ^ "NEO Energy completes billion-dollar ExxonMobil acquisition amid ongoing OGA probe". Energy Voice. 9 December 2021. Retrieved 3 May 2024.
  12. ^ "ExxonMobil sells bulk of UK North Sea assets to fast-growing NEO Energy". S&P Global Commodity Insights. Retrieved 10 May 2024.
  13. ^ "NEO Energy acquires UK business of JX Nippon". Oil & Gas Journal. 29 November 2021. Retrieved 3 May 2024.
  14. ^ "NEO Energy to buy JX Nippon UK assets in £1.2billion deal". Energy Voice. 26 November 2021. Retrieved 3 May 2024.
  15. ^ "Neo Energy buys JX Nippon assets in North Sea for $1.66bn". Upstream Online. 28 November 2021. Retrieved 3 May 2024.
  16. ^ "Neo Energy joins group in North Sea field". The Times. Retrieved 3 May 2024.
  17. ^ "Giant North Sea asset changing hands after Dana-Neo deal". The Press and Journal. 17 November 2023. Retrieved 6 May 2024.
  18. ^ "HitecVision Is Said to Weigh Options for UK North Sea Oil Producer NEO". Bloomberg. 11 March 2024. Retrieved 3 May 2024.
  19. ^ "24 licences offered in second tranche of 33rd oil and gas licensing round". North Sea Transition Authority. Retrieved 7 May 2024.
  20. ^ "Sunak to allow oil and gas exploration at sites intended for offshore wind". The Guardian. 2 May 2024. Retrieved 7 May 2024.
  21. ^ "NSTA reveals winners of latest North Sea licensing round". Energy Voice. 3 May 2024. Retrieved 3 May 2024.
  22. ^ "NEO fined £100,000 for breaching its vent consent". North Sea Transition Authority. Retrieved 6 May 2024.
  23. ^ "UK Oil Regulator Fines NEO Energy". Rigzone. Retrieved 6 May 2024.
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