Oil company Verus Petroleum secures North Sea oil fields deal

The North Sea oil industry is showing signs of recovery

An Aberdeen-based oil exploration and production company has spent $400m on a share of oil fields previously owned by a Japanese conglomerate.

Verus Petroleum acquired the reserves and some production capacity, mainly located west of Shetland, from Itochu .

Verus is a newly-created company, backed by a Norwegian private equity fund.

The deal is being funded by equity, cash and debt, through a bank consortium.

Versus is not a producing company and will own a minority stake in several fields, including Barra, Harris and Hudson.

'Significant new investment'

Under the deal, it also secures a small stake in the North Sea's Brent Pipeline Network and the Sullom Voe oil and gas terminal in Shetland.

Since the industry slump turned to modest growth, such private equity deals have been bringing significant new investment to the UK's offshore oil and gas industry.

The recovery has been helped by a higher oil price, with the Brent crude benchmark trade mark up today, and trading close to eighty US dollars.

Verus Petroleum's chief executive Alan Curran said: "This transaction builds on our Boa oil field acquisition in 2017, and our acquisition of interests in the Alba oil field and the Babbage gas field earlier this year. The combined Alba, Babbage and Cieco acquisitions increase our net production to around 18,000 boepd (barrels of oil equivalent per day).

"The Western Isles development includes the Harris and Barra oil fields. Production has exceeded expectations since it started in November 2017 and is currently on plateau at in excess of 40,000 boepd, with an estimated field life of 15 years.

"HitecVision's continued support provides Verus with a solid capital base which is a robust foundation for further growth."