EnQuest and Delek have not been able to reach an agreement with regard to the potential sale of an interest in the Kraken development.
In July this year, EnQuest entered into discussions with Delek for the sale of an interest in the Kraken development to one of Delek’s subsidiaries.
The two companies signed a non-binding memorandum of understanding and were working towards executing binding transaction documents, under which EnQuest was to farm out to Delek a 20% working interest in Kraken.
In addition, the proposal said that Delek would bear its share in the project capex from January 1, 2016. It was also proposed that, at completion, Delek would advance $20 million to EnQuest for a period of up to 5 years at an annual interest of 3 percent which would be returned to Delek in the event that its costs were not covered by revenues within 5 years from the completion date.
First oil production from the EnQuest-operated Kraken field, developed with the FPSO unit and subsea wells, is expected in 2017. The company holds 70.5 percent stake in Kraken.
Subsea World News Staff