UK's Serica inks purchase of BP Culzean gas field stake in expansion drive

UK upstream company Serica Energy has agreed to buy BP's 32% stake in the country's highest-producing gas field, Culzean, subject to any pre-emption by the other stakeholders, it said Oct. 13.

It is the latest move in a run of deal-making by Serica Energy including its Sept. 30 announcement it will buy the upstream business of Prax Group -- which includes the planned takeover of TotalEnergies' Greater Laggan gas assets in the West of Shetland area. In early 2024, Serica also farmed into the planned Greater Buchan oil field redevelopment, likely the largest UK oil project awaiting approval.

Serica is acquiring the license containing the Culzean gas and condensate field, and an adjacent license it sees as having exploration potential. TotalEnergies is the operator of Culzean, and together with third partner Neo Next has the right to pre-empt the purchase.

"Should this transaction complete, it would deliver a step-change for Serica, adding material production and cash flows from the largest producing gas field in the UK," Serica CEO Chris Cox said in a statement. "Culzean is a world-class asset, delivering gas from a modern platform with exceptionally high uptime and low emissions."

On stream since 2019, Culzean lies in the center of the North Sea, supplying gas to the Central Area Transmission System pipeline. It is a high-pressure, high-temperature field, and as well as gas produces waxy condensate, which is stored in a nearby specialist vessel, the Ailsa, with heating capability to keep the condensate mobile for loading.

The BP stake being purchased amounts to 32% of Culzean, while TotalEnergies holds 49.99% and Neo Next 18.01%.

The deal has an "economic date" of Sept. 1, 2025, and involves an upfront cash payment of $232 million followed by some adjustments, including a link to any potential changes to the UK's Energy Profits Levy, as well as a link to the outcome of any exploration drilling.

BP's share of Culzean production in the first half of the year was 25,500 b/d of oil equivalent, implying production of nearly 80,000 boe/d on a gross basis.