UK's Harbour Energy says on track with North Sea Talbot oil tie-in

UK-based upstream producer Harbour Energy plans to start its new Talbot oil and gas tie-in project at the J-Area hub in the North Sea by the end of 2024, boosting Ekofisk blend volumes, it said Aug. 8.

Harbour, in a statement, reported a 19% year-on-year drop in its UK oil and gas production in the first half of 2024 to 149,000 b/d of oil equivalent. It noted a significant maintenance impact, including a planned shutdown in June at the J-Area, which sends oil and gas to Teesside, with the liquids loaded as Ekofisk blend. Ekofisk is a component in the Platts Dated Brent price assessment process.

Talbot, a multiwell development, is expected to recover 18 million boe of light oil and gas over 16 years. It will add to oil volumes flowing through the J-Area into the Norpipe route to Teesside, contributing to the predominantly Norwegian Ekofisk blend.

Harbour also flagged an ongoing maintenance impact on production through much of the Q3 2024, including a 40-day shutdown at the Britannia hub starting in August, which will impact flows into the Forties blend. The maintenance was expected to start in the next few days and be completed in September, according to a source close to the situation. Britannia was also expected to be impacted by a four-week shutdown of the SAGE gas pipeline starting Aug. 27(opens in a new tab).

Harbour has made "good progress to date on the maintenance shutdowns and our UK capital projects, which are on track to materially increase production in the fourth quarter," it said.

The North Sea typically sees a drop in production volumes in the summer due to maintenance.

Non-UK diversification

Harbour reiterated its efforts to diversify away from the UK, with an acquisition of Wintershall Dea assets underway, having strongly objected to punitive tax rates. It said its overall effective tax rate in the first half of 2024 was 85%, partly reflecting not-fully deductible costs under the UK tax regime.

Harbour reported 10,000 boe/d of additional production outside the UK in the first half of the year, in Indonesia and Vietnam. It noted progress in Mexico, where Front End Engineering and Design has begun for the Zama oil project, estimated at 700 million barrels of light crude. Harbour is set to increase its Zama stake from 12% to 32% following the Wintershall acquisition.

In the first half of 2024 "we made significant progress towards completing the Wintershall Dea acquisition, which is now expected early in the fourth quarter," CEO Linda Cook said.

"The acquisition will transform the scale, geographical diversity and longevity of our portfolio and strengthen our capital structure, enabling us to deliver enhanced shareholder returns over the long run while also positioning us for further opportunities."

Platts Dated Brent was assessed at $79.91/b on Aug. 8, up $3.64 on the day. Platts is part of S&P Global Commodity Insights.