NEO Energy Group Ltd has announced the complete acquisition of the Western Isles floating production, storage, and offloading (FPSO) vessel from Dana Petroleum (E&P) Limited, which currently holds a 76.9188 percent interest in the FPSO. The financial details of the transaction have not been disclosed.

NEO Energy intends to redeploy the FPSO at the Buchan field redevelopment in the central North Sea, near the United Kingdom. Simultaneously, co-owner of the Buchan asset, Jersey Oil & Gas plc (JOG), is set to receive a further cash payment of $9.4 million from NEO Energy as part of the finalization of the Greater Buchan Area (GBA) development solution, according to the terms of the farm-out transaction announced in April.

The Western Isles FPSO, operational since early 2017, is scheduled to come off-station around the second half of 2024 as part of the planned cessation of production from the Western Isles fields. JOG highlighted the vessel's operational capabilities and relatively limited service life to date, making it an excellent fit for the planned redevelopment of the Buchan field.

The preferred solution for the GBA redevelopment involves the redeployment of an FPSO, considered the lowest-cost development option with the lowest full-cycle carbon footprint among potential alternatives. This approach allows for the reuse of existing infrastructure, and with minimal modifications, the vessel can be connected to anticipated third-party floating wind power developments near the GBA.

Modifications planned for the FPSO include the installation of water injection booster pumps, produced water injection modifications, and preparation for future electrification. JOG anticipates completing these modifications by early 2026, with the vessel ready for deployment to the field location and production expected to commence in late 2026. The North Sea Transition Authority has expressed no objections to the planned redeployment of the FPSO in the Buchan field.

The acquisition terms commit NEO Energy and JOG to acquire the vessel upon approval of the Buchan field development plan (FDP). Until then, the Buchan partners will be responsible for the costs of storing the vessel from the expected handover date in the second half of 2024. JOG CEO Andrew Benitz emphasized the significance of this acquisition, aligning with the low carbon strategy and net-zero objectives of the industry.

Work is progressing well on the front-end engineering design (FEED) studies necessary for FDP approval. This involves specifying the drilling program, designing subsea infrastructure, and finalizing the modifications program for the FPSO. The environmental statement for the Buchan redevelopment is also in progress, with submission to the regulator expected before the end of the year, along with the draft FDP.

The first phase of the GBA work program focuses on the redevelopment of the Buchan field, with subsequent phases involving the tie-back of the Verbier and J2 discoveries within the GBA license area and the potential inclusion of regional third-party discoveries tied back to the FPSO.