It was, said Gary Robinson, leader of Shetland Islands Council, an ending and a new start. BP had just announced, on 24 January, that after almost 40 years, it was handing over management of the giant Sullom Voe Oil Terminal to Enquest, a specialist in end-of-life management of hydrocarbon resources.
“This is the end of an era for the oil and gas industry but it is also the beginning of a new era,” said Mr Robinson. “The significance for Shetland cannot be underestimated. This is a positive opportunity for the future of Shetland. It’s a big change for Shetland and for SVT. EnQuest are known for managing end of life assets and extending their life. They will have the opportunity to focus on SVT and attracting new business, particularly from the West of Shetland. The Council and the wider Shetland Partnership will be working with them to realise that opportunity. We are now looking to EnQuest to develop the arrangements at SVT to provide a competitive environment for opportunities to the west of Shetland.”
BP agreed to sell part of its interests in the Magnus oil field and some associated pipeline infrastructure in the UK northern North Sea and in the Sullom Voe Terminal (SVT) on Shetland to EnQuest.
Included in the agreement are: 25% of BP’s 100% stake in Magnus, 25% of BP’s interests in a number of associated pipelines and a 3% interest in the Sullom Voe Terminal from BP Exploration Operating Company Limited’s (BPEOC) current total 12% stake. The sale price of $85 million is expected to be met by EnQuest from the sharing of future cash flows from the assets and the agreement will not include any upfront payment to BP.
Subject to partner, regulatory and other third party approvals, operatorship of both Magnus and SVT will transfer from BP to EnQuest on completion. The sale will not affect BP’s rights to capacity in SVT.
Malcolm Bell, SIC Convener, said: “We have a positive relationship with BP which we have sustained over many decades. We now look to develop that with EnQuest. We look forward to developing with them a sustainable future for the Sullom Voe Terminal.”
Alastair Cooper, Chair of Development, said: “The Council will maintain its focus on the protection of Shetland’s environment, and we will work with EnQuest through SVT Ltd. to embed this in the transfer of the existing legal agreements with the operator.”
BP group chief executive Bob Dudley commented: “EnQuest’s experience of investing in and extending the life of mature assets in the North Sea make them a natural operator of Magnus and Sullom Voe in this later phase of their life. We believe this will enable them to prolong the life of the assets, benefiting the region and creating additional value for both EnQuest and BP shareholders. In addition to investing in and growing our core businesses, BP will continue to seek innovative opportunities such as this to work with partners to maximise value creation from our entire portfolio.”
