London: Premier Oil Plc, the UK crude and natural gas explorer, focusing on Vietnam and Indonesia, will join Hess Corp in exploring the north Red Sea off Egypt.
Premier will boost exploration spending by 25 per cent to about $200 million (Dh734 million) in 2011 from this year, according to Chief Financial Officer Tony Durrant. The company raised its debt facility by $470 million to $1.8 billion to fund projects and also extend the maturity of its borrowings.
The Egyptian development will be "venturing us a little bit into deepwater", Durrant said yesterday in a phone interview. There "are two separate geological plays with some very large potential" that are "high risk at this stage".
The London-based company aims to drill 23 wells in the next 13 months, targeting about 400 million barrels of oil equivalent resources, it said yesterday in a statement. In addition to the project with Hess, the fifth-biggest US oil company, Premier plans to explore the South Darag block in the Gulf of Suez.
The partners plan to drill the north Red Sea's Block 1 in December, with a rig previously used by Cairn Energy Plc off Greenland. Premier has decided not to bid for assets being sold by BP Plc in Pakistan, Durrant said. BP wants to sell about $30 billion of global assets to cover the costs of the oil spill in the Gulf of Mexico.
BP Pakistan
"Of course, Pakistan is the country in which we are active," Durrant said. "But the BP portfolio is relatively mature and when we had a look at it we decided that technically we were unlikely ever to meet BP's objectives."
Wednesday, Premier and its partners received approval from the UK government to go ahead with the $500 million Huntington field development in the North Sea. The Sevan Voyageur vessel will be used to pump oil from the field with output scheduled to start in early 2012.
Premier plans to invest about $500 million in project development in 2011, in line with this year's plans, Durrant said.
Durrant declined to comment on a report in the Observer newspaper that Premier had been the subject of an approach by Korea National Oil Corp., which triggered the biggest intra-day gain in almost 20 months yesterday.
