KUALA LUMPUR: Dagang NeXchange Bhd (DNeX), via its 90 per cent-owned subsidiary Ping Petroleum Ltd, has passed a key milestone after receiving a letter of 'no objection' from the North Sea Transition Authority (NSTA).
This was concerning the company's development concept for the Avalon discovery in the Central North Sea in the UK.
Ping had last year announced the purchase of the remaining 50 per cent interest in UK North Sea Block 21/6b, License P.2006, containing the Avalon Oil Development from Summit Exploration and Production Ltd, a wholly-owned subsidiary of Sumitomo Corporation, bringing Ping's ownership in the licence to 100 per cent.
With a total estimated recovery of 23 million barrels of oil, production from Ping's second oilfield asset is scheduled to begin between mid-2024 and mid-2025, subject to the availability of key materials and equipment.
Group managing director Tan Sri Syed Zainal Abidin Mohamed Tahir said receiving 'no objection' to the development concept represents a material opportunity to expand and diversify Ping's portfolio of oil assets according to the UK's production and emissions-reduction targets.
He said the concept comprises tie-back of Avalon production wells to a re-used floating production storage and offloading facility (FPSO), which has spare ullage to provide an offtake route for nearby stranded discoveries.
He added that discussions are ongoing with the UK regulator and supply chain to decarbonise the development through integration with floating offshore wind.
"The next step for Ping is to submit the company's field development plan for Avalon to NSTA by the next quarter.
"Once approval is attained, the company will proceed with the full development programme," he said.
He said the Avalon field is planned to produce 20,000 barrels of oil per day, providing a material increase in production and diversifying the asset base.