Japan Petroleum Exploration (Japex) is seeking buyers for its stake in an oilfield in the British North Sea, the latest in a string of exits from the ageing basin as companies face growing uncertainty over government tax plans.
Japex is calling for bids for its 15% interest in the BP-operated Seagull oil and gas field, according to a document seen by Reuters.
“We are exploring all possible measures to enhance the value of the UK operation, and it (a potential exit) is one of the options under consideration,” a Japex spokesperson told Reuters in an emailed statement, adding that no decision has been made yet.
Japex acquired the stake in the field in 2014. Seagull started production in 2023, and is expected to produce around 50,000 barrels of oil equivalent per day at peak output.
Japex said in the document it is considering exiting its UK upstream position via either the sale of its local unit or the sale of its stake in Seagull, its only asset in the basin.
Japex holds 150 million pounds ($195 million) in tax losses, which would allow any buyer to offset future investments in the basin.
The exact value of the stake was unclear. Bid deadline for Japex’s stake is expected in December 2024.
In the Seagull field, Japex’s partners include UK oil major BP, with a 50% stake, and Ithaca Energy, holding a 35% interest.
Japex’s divestiture plan highlights the ongoing retreat from the ageing North Sea basin, as companies seek to capitalise on newer and more lucrative opportunities elsewhere.
In July, U.S. oil major Exxon Mobil completed its exit from the North Sea region, where it was present since 1964. Rival Chevron is also preparing to leave the basin.
Smaller North Sea operators including Harbour Energy and Serica Energy have said they are planning to limit investments and seek opportunities overseas in the wake of rising fiscal uncertainty.
The Labour government’s proposal to increase a windfall tax on oil and gas producers to 38% from 35% starting Nov. 1, has been deeply unpopular within the energy sector.
The increase will bring the headline rate of tax on oil and gas activities to 78%, among the highest in the world. Its duration was also extended by a year to March 2030.
The government is also seeking to change investment incentives. The exact details are expected to be announced with the budget on Oct. 30.
(Reporting by Ron Bousso and Arunima Kumar in London, Yuka Obayashi in Tokyo; Editing by Emelia Sithole-Matarise)