WoodMac: Chrysaor deal continues ‘incredible growth story’

Chrysaor’s £2bn deal to acquire ConocoPhillips’ UK business continues a “story of incredible growth”, according to leading analyst firm WoodMackenzie.

The private equity-backed company is taking on a host of assets, including operations for the Greater Britannia Area and J-Area hubs, making it the largest net producer in the UK North Sea.

It is also taking another stake West of Shetland in the BP-operated Clair field, complementing its other 10% stake in Schiehallion.

WoodMac said it “wouldn’t be a surprise” to see it make further moves in this region in the future.

WoodMac’s Romana Adamcikova, senior analyst, North Sea upstream, said:  “This deal will make Chrysaor the top producer in the UK in 2019 and keep it among the UK’s largest producers for the next few years. Considering the company was a relatively small producer before it acquired a batch of assets from Shell in 2017, this is a story of incredible growth.

“The deal continues a theme seen across the North Sea in recent years with regionally focused, private companies acquiring assets from larger, international players.

“Chrysaor has already shown it is willing to take older assets and invest to increase production with its efforts at the Greater Armada Area, which was due to be decommissioned before Chrysaor acquired it from Shell in 2018.

“It could take a similar approach here, particularly with it now becoming operator at the Britannia and J-Area hubs in the Central North Sea, which have potential for further growth.

“ConocoPhillips is shifting its focus towards lower cost opportunities elsewhere in the world, particularly in the US. Among such a wider global portfolio, UK fields would have struggled to compete for capital.

“Chrysaor also gains a stronger presence in the West of Shetland with a stake in Clair. It already had an interest in the Schiehallion field.

“There is huge growth potential in the region and it wouldn’t be a surprise to see Chrysaor make further moves in the near future, to bolster its mid- to long- term production outlook.”

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