Following the completion of the acquisition of an initial 25% interest in the Magnus oil field on 1 December 2017, EnQuest PLC (‘EnQuest’) is pleased to announce it has agreed with BP to undertake the management of the physical decommissioning activities for Thistle and Deveron.
Under the terms of this agreement with BP:
- EnQuest will receive $30 million in cash in exchange for undertaking the management of the physical decommissioning and making payments by reference to 3.7% of the gross decommissioning costs of the Thistle and Deveron fields when spend commences, subject to a cap of £57 million. EnQuest’s current estimate of its exposure to decommissioning costs is lower than the $30 million cash being received; and
- EnQuest will also have an option, exercisable over a 12 month period, to receive a further $20 million in cash in exchange for making additional payments by reference to 2.4% of the gross decommissioning costs of these fields, subject to a cap of £42 million.
The transaction aligns the interests of the parties involved in the production and decommissioning phases, reflecting the industrial logic for the operator to undertake the decommissioning of these assets.