RockRose Energy faces being ousted as operator of a North Sea hub as it today seeks to be re-admitted to the Stock Exchange.
Taqa, the majority stakeholder in the Greater Brae Area (GBA), has been appointed as the new operator following a vote with partners JX Nippon and Spirit Energy to “discharge” RockRose.
The vote is not binding until approval is given by the Oil and Gas Authority (OGA), but the move could see RockRose lose the licences in July next year.
RockRose said this would not lead to financial loss but may make future acquisitions “more complex and cumbersome” when trying to satisfy the OGA of its “capability to assume operatorship”.
Taqa confirmed the vote had taken place but would not comment further due to “confidentiality provisions in the Joint Operating Agreements”.
RockRose took on an operated stake of between 37%-40% in the GBA fields as part of its acquisition earlier this year of Marathon Oil’s UK business.
The firm is today being re-admitted to the stock exchange following the deal, which caused trading to be suspended while the reverse takeover took place.
RockRose said it was “unusual” Taqa did not give any reason for its proposals, which it informed RockRose of on June 20, prior to the Marathon deal completing.
The OGA said it will consult with the Department for Business Energy and Industrial Strategy and the Health and Safety Executive in making a decision, which is not expected to be effective until 1st July, 2020 if it goes ahead.
It is thought this would be the first instance of the OGA approving a change of operatorship of this kind since its inception, although there are instances in the past of the then Department of Energy doing so.
RockRose agreed the acquisition deal in February, marking a complete exit from the UK for Houston-headquartered Marathon which has increasingly switched its focus to onshore production in the US.
The Brae area lies about 170 miles north-east of Aberdeen and started producing via the Alpha platform in 1983. Brae Bravo came on stream in 1988, followed by East Brae in 1993.
Marathon submitted decommissioning plans for the GBA infrastructure in mid-2017, and Brae Bravo recently stopped producing.
However, analysts have indicated that the deal might inject new investment in the area and fresh production.
A RockRose spokesman said: “RockRose continues to discuss the proposal, which is not expected to be effective before 1st July 2020 if at all, with its partners in an effort to establish the best way forward for the asset, the staff, and the joint venture.
“Any change of operator requires the consent of the OGA and, while the regulator is aware of this situation, as yet it has not been asked to approve Taqa’s appointment in place of RockRose. “
Taqa is seeking licenses P313, which covers East Brae and the Braemar field and P108, which also covers East Brae as well as Central, South, West and Bravo.
No reference has been made to licence P340 which also covers the latter fields, although Taqa also has majority stake in this licence, operated by RockRose.
The Greater Brae Area is also made up by two other blocks operated by Shell.
A Taqa spokeswoman said the firm is “committed to the Brae Area” and that its priority is “ensuring continued safe and reliable operations, in pursuit of maximising economic recovery in the area”.