NORTH Sea-focused Jersey Oil & Gas has seen its shares surge six per cent after an analyst predicted interest in the company’s flagship project would be boosted by the Government’s energy security strategy.

Jersey is working on plans for a big North Sea development that will involve restarting production from the Buchan field in the Moray Firth and bringing two finds onstream.

The company has worked up the Greater Buchan Area (GBA) plans amid challenging sector conditions in recent years. Interest in North Sea projects waned after oil and gas prices plunged amid the fallout from the pandemic, which started as the industry emerged from a deep downturn.

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Following the increase in prices fuelled by the recovery from the pandemic, the energy strategy unveiled by the Westminster Government last week may help rekindle interest in the area.

Daniel Slater at Jersey’s joint house broker Arden Partners said the strategy assumes North Sea oil and gas output will play a key role in meeting the UK’s energy needs.

The Herald: Jersey Oil & Gas chief executive Andrew BenitzJersey Oil & Gas chief executive Andrew Benitz

 

“This focuses on domestic production from the North Sea, both from a carbon footprint (domestic volumes typically have much lower emissions than those that are imported) but also a security of supply point of view,” noted Mr Slater.

He said the strategy’s emphasis on new developments is particularly positive for Jersey. It suggests the Government will provide strong support for upcoming projects and, likely, expedited clearances for developments.

Mr Slater said potential partners in GBA would likely be encouraged by the strategy and promises of regulatory support, alongside the “persistently high oil price”.

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Israeli-owned Ithaca Energy’s decision to buy Siccar Point Energy for up to $1.5 billion, which was announced last week, suggested investors were prepared to back significant North Sea development projects. Siccar Point plans to develop the giant Cambo field off Shetland.

Former Ithaca Energy chief executive Les Thomas was appointed chairman of Jersey Oil & Gas in November. Graham Forbes became Jersey's chief financial officer after holding that role at Ithaca.

Jersey chief executive Andrew Benitz said the appointments represented a vote of confidence in the firm from the two men, who helped grow Ithaca into one of the  biggest independents operating in the North Sea.

Shares in Jersey Oil & Gas closed up 11.5p at 216.5p.