London-listed oil and natural gas newcomer Harbour Energy said March 17 it expected to continue increasing production this year, thanks to a new project startup and increased drilling, the latter by the company and partners, such as BP.
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Harbour, formed in 2021 out of privately owned Chrysaor and London-listed Premier Oil, said it was targeting annual production this year of 195,000-210,000 barrels of oil equivalent a day, having produced 219,000 boe/d over the first two months, and up from 175,000 boe/d in 2021.
With its core production in the North Sea, it said it was close to starting up the long-delayed Tolmount gas project, likely at the end of March, estimating the field would increase UK gas production 6%, with initial output of 40,000 boe/d on a gross basis.
It expects to participate in 23 development and infill wells to be drilled this year, including five that BP will drill at the Clair Ridge heavy oil area, in which Harbour holds a 7.5% stake.
BP and partners were making progress toward a third development phase for Clair, a multibillion barrel West of Shetland field that extends over 220 square km, it said.
At its own operations, Harbour expects to increase the number of rigs it has in operation to eight by midyear from four at present, including an additional rig in UK waters and three in Southeast Asia, CEO Linda Cook said in a call with investors.
The company said it had successfully appraised the proposed Talbot discovery near the J-Area fields — purchased from Shell and ConocoPhillips in 2017 and 2019, respectively — and plans to turn the find into a multiwell tieback to the J-Area facilities.
In its overseas business, Harbour said its Tuna project in the Natuna Sea off Indonesia, estimated at more than 100 million boe, had not yet been affected in any way by Russian partner Zarubezhneft because of the Ukraine conflict, but Harbour was watching the situation. Harbour also plans an exploration well in the Andaman Sea off Indonesia in the second quarter alongside BP and the UAE's Mubadala.
"2021 was a transformational year, with completion of the merger, our third significant transaction since 2017," Cook said, adding she anticipated further acquisitions, with the international oil and gas companies likely to continue disposing of upstream assets.
On the overall outlook in the context of recent crises, Cook, who previously worked at Shell, said she expected major European companies to continue on their course of reducing commitments to capital-intensive upstream projects while noting recent high prices were not certain to persist.
"I can't see especially the European majors, changing course ... . We have to keep in mind just because prices are high now it doesn't mean that's where they're going to be in six months," she said.
"The majors take a very long-term view on things ... Are they enjoying the cash flow they're getting today from their upstream assets that they may otherwise be thinking about divesting at some point? Of course they are, absolutely. A lot of them will plough that back into other areas of the business though, not into exploration, or not into major new multibillion-dollar oil and gas divestments that may not pay out for 10 or more years."
Separately, London-based rival Neptune Energy, which is also focused on Europe with additional production in Asia and North Africa, said it expected to increase its production this year to 135,000-145,000 boe/d from 130,000 boe/d, provided Norwegian partner Equinor is able to restart the Hammerfest LNG facility as planned in May following fire damage, and also on the performance of Algerian gas facility Touat. It anticipates a boost this year from two Norwegian projects that came on stream in 2021, Gjoa P1 and Duva, as well as Merakes, offshore Indonesia.
"Our natural gas-weighted and OECD-focused business continues to position us well for current macro trends, including the energy transition," Neptune's chairman, Sam Laidlaw, said in a statement. "We have strengthened our commitment to lowering carbon emissions and have reshaped areas of the business to reflect our investment priorities and to accelerate our lower-carbon projects."