Ithaca Energy acquisition reawakens Cambo project plans

OIL and gas company Ithaca Energy is acquiring Siccar Point Energy in a deal worth up to US$1.46bn, which could see the development of the UK’s controversial Cambo oilfield.

The project has faced significant opposition from environmentalists, who highlighted it contradicts advice from the International Energy Agency, which said last year that no new oil and gas fields are needed in the pathway to net zero. In December 2021, Siccar Point Energy decided to pause the project after 30% stakeholder Shell pulled out for economic reasons.

Ithaca said that Cambo, expected to deliver up to 170m boe over a 25-year operational life, is one of the largest and most strategically important discoveries in the UK North Sea. The company adds that it will materially reduce the need for imports and, along with the Rosebank field – another Siccar Point Energy asset – it will help contribute to UK energy security.

A final investment decision for both fields is expected next year.

Alan Bruce, CEO of Ithaca Energy, said: “The development of the Cambo and Rosebank fields is a huge opportunity to not only help secure the UK’s energy future for at least another quarter of a century, but also to create thousands of direct and indirect jobs in the process.”

Including four of the UK’s largest oil fields, the deal is expected to accelerate Ithaca’s growth and position it as a leading exploration and production operator in the UK North Sea.

As part of the deal, Ithaca will also acquire two current top UK producing fields, Mariner and Schiehallion, which it said will add immediate production capacity as well as room to grow through future drilling.

The acquisition will double Ithaca’s recoverable reserves and support production of at least 80,000–90,000 boe/d through the next decade, with the potential for further increases in the future.

Ithaca plans to develop the newly-acquired assets using technologies to reduce emissions, and operating without routine flaring or venting of hydrocarbons. It will focus on keeping emissions in line with its aim to reduce CO2 output by 25% by 2025.

Ithaca’s purchase of Siccar Point Energy is worth up to US$1.46bn, including US$1.1bn upfront and a series of contingent payments totalling a maximum of US$360m. It is expected to close around the end of Q2 2022.