French oil major TotalEnergies said Thursday it wouldn't sanction the North Platte deepwater project in the U.S. Gulf of Mexico and that it would withdraw from it. Equinor said it was disappointed with the decision, but that it would move forward with the development.
"The decision not to continue with the project was taken as the company has better opportunities of allocation of its capital within its global portfolio," TotalEnergies said.
TotalEnergies, via its affiliate TotalEnergies E&P USA, held a 60% operated interest in North Platte.
The company said it had informed its partner Equinor (40%) as well as the relevant authorities of its immediate withdrawal from the project, and of its resignation as operator "which will be effective following a short transition period to ensure an orderly hand-over of operatorship."
The North Platte is a Paleogene oil discovery covering four blocks in the Garden Banks area in the Gulf of Mexico. It is located 275 kilometers off the coast of Louisiana in water over 1,300 meters deep. The North Platte discovery had been a part of the Cobalt International Energy portfolio, a company that went bankrupt in 2017. Total acquired Cobalt's interest in April 2018, marking the return by TotalEnergies to the GoM as the operator.
TotalEnergies had planned to develop the project using a semi-submersible floating production unit, with the development expected to produce 75,000 barrels of oil per day at plateau.
The North Platte field straddles four blocks of the Garden Banks area. According to info shared previously by TotalEnergies, the reservoir is of high quality, both in porosity and permeability, with thickness in places exceeding 1,200 meters.
Back in January 2020, TotalEnergies (then known as just Total) awarded Worley a FEED contract for the North Platte field development in the U.S. Gulf of Mexico.
It has been said that the development will require the use of 20 kpsi technologies, with the field development based on eight subsea wells and two subsea drilling bases connected via two production loops to a newbuild, lightweight floating production unit (FPU). Production was to be exported through existing oil and gas subsea networks. According to World Energy Reports info, Samsung Heavy Industries and Hyundai Heavy Industries had in mid-2021 submitted bids to build the FPU.
Separately, TotalEnergies said on Thursday that increased hydrocarbon prices helped it return to profit in 2021, with net income of $16 billion and adjusted net income of $18.1 billion, the highest since record years in 2007 and 2008.
Equinor disappointed
Offshore Engineer has reached out to Equinor, seeking comment and information on Equinor's plans for the North Platte, now that TotalEnergies has decided to withdraw.
"While we’re disappointed by TotalEnergies’ decision to withdraw, Equinor remains committed to developing the North Platte project,” said Chris Golden, Equinor US country manager. “This high-quality project is a strategic fit for our material position in the US Gulf of Mexico and will add significant value with relatively low carbon emissions intensity. We are aligned with TotalEnergies to facilitate an orderly transition, including fulfilling our legal and regulatory requirements to move forward in development of the field."
Worth noting, in Equinor's annual report for 2020, the North Platte project was dubbed one of the key projects in its international portfolio, along with Bacalhau (formerly Carcará), Bay du Nord, Rosebank, Vito, Peregrino phase 2, BM-C-33, North Komsomolskoye, and Block 17 satellites in Angola.
The article was updated to include a statement sent to Offshore Engineer by Equinor