Itochu Seeks North Sea Sale

June 12, 2018

World Energy Reports LLC.
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Japanese commodity trading house Itochu is seeking buyers for stakes in two North Sea oilfields, a pipeline and a terminal, a document seen by Reuters shows.

The sale, run by Scotiabank, could fetch up to $250 million, according to banking sources.

The transaction would mark the latest exit of a long-standing player in the ageing basin as a new generation of companies, many with the backing of private equity, seeks to inject new life into oil and gas fields.

Itochu, through its British subsidiary CIECO UK, is offering to sell its 23 percent stake in the Western Isles field cluster in the northern North Sea, located some 160 km (100 miles) east of the Shetland islands.

The field, which is operated by British group Dana Petroleum, started production in November 2017 and yielded 45,000 barrels of oil per day in April 2018, according to the sale brochure.

Itochu is also selling a 26 percent stake in the Hudson field and small stakes in the Brent System Pipeline and the Sullom Voe Terminal.

Bids are due by midday London time on June 27, the document showed.

Itochu and Scotiabank did not respond to requests for comment.

Itochu recently agreed to buy a 20 percent stake in the Iraqi West Qurna 1 oilfield from Royal Dutch Shell, signalling that the Japanese firm is turning its attention to new regions. It entered the North Sea in the early 1990s.

The sale does not include CIECO's 12 percent stake in the Verbier discovery, operated by Norway's Equinor.

(Editing by Dale Hudson)

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