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North Sea firms postpone oilfield opening after early UK election called

3 British energy companies have decided to delay by a year the planned start of oil production at their jointventure oilfield in the North Sea, mentioning the need for clarity on the financial policies of the next government.

Jersey Oil and Gas, which owns 20% of the Buchan field, provided the update on Wednesday on behalf of the joint endeavor partners, among them Serica Energy and 50%- stake-owning operator NEO Energy.

Shares in Jersey were down 18% and Serica's shares dipped about 1.5% after the news.

Lots of North Sea oil and gas producers have actually been combining, moving overseas, and cutting investment as Britain's windfall tax slashes earnings and the opposition Labour Party threatens more tax if it wins the next basic election.

When Serica bought its 30% stake in the Buchan field from Jersey Oil and Gas in February, the target for very first oil production remained in the 4th quarter of 2026.

That was before last month's call by British Prime Minister Rishi Sunak for a general election on July 4. Jersey stated on Wednesday the first oil target has now relocated to late 2027 after the earlier-than-expected election date.

Jersey stated the Buchan Field Development Strategy was on course for end-2024 approval.

But it added, The exact timing for accomplishing this key milestone and making it possible for project sanction is naturally linked to securing fiscal clarity from the next federal government and ensuring that the project stays financially appealing.

The UK Treasury department decreased to comment due to pre-election guidance. The Labour Celebration did not right away react an ask for comment.

Labour, with a strong lead in polls, has actually pledged to raise the windfall tax by 3% to assist fund its energy transition technique, which the North Sea oil industry has grumbled would further prevent financial investment.

We anticipate the UK federal government will offer financial clarity such that the operator of the Buchan redevelopment will have sufficient confidence in the financial regime to progress with task sanction, said WH Ireland expert Brendan Long.

It is the very best undeveloped oilfield of its kind in the UK North Sea in terms of scale and low danger, he included.

(source: Reuters)