British oil and gas exploration and production company Serica Energy is set to acquire 30% interest in the Greater Buchan Area licences (GBA) via its subsidiary Serica Energy (UK).

The company will acquire the non-operated stake in GBA (P2498 and P2170 licences) from Jersey Oil & Gas (JOG) through a farm-in transaction.

Subject to regulatory, partner and interested party approvals, the transaction is expected to complete in early 2024.

Once complete, Serica Energy (UK) and JOG will hold 30% and 20% stakes in the GBA respectively. NEO Energy (operator) will continue to hold 50% interest.

As agreed, Serica will pay $6.8m in cash as consideration on completion.

Although the company is not committed to participate in the GBA developments under the terms of the transaction, it will make additional payments to JOG in case of participation.

This includes $7.5m on approval of the Buchan field development plan (FDP) by the North Sea Transition Authority (NSTA) among other milestone payments.

Serica chief executive Mitch Flegg said: “We are delighted with this transaction which gives Serica a significant interest in the proposed Greater Buchan Area project, potentially adding a third production hub and further resilience to Serica’s North Sea portfolio.

“In common with our other hubs, the GBA plan involves utilising existing infrastructure – in this case an FPSO – with the possibility of exploiting multiple accumulations in the area. Moreover, the development has been designed to deliver an industry-leading low level of carbon emissions, consistent with Serica’s objective of reducing the overall carbon intensity of its activities.”

The GBA includes multiple oil and gas accumulations around 150km north-east of Aberdeen, in the Outer Moray Firth, offshore UK. Buchan field, which terminated production in 2017, is one of the largest of the accumulations.

The Concept Select Report to redevelop Buchan received a no objection letter from the NSTA. It is based on using a new production hub at the field leveraging floating production, storage and offloading (FPSO) vessel.

A proposed Field Development Plan (FDP) will be submitted to the NSTA soon, with approval expected in the second half of 2024.

The Buchan project may commence production in late 2026, subject to project sanction and regulatory approval. It is expected to produce around 35,000 barrels per day.