- KPMG appointed as administrator of U.K. oil producer
- Some of company's assets bought by Cairn Energy, Enquest
The slump in oil prices claimed a victim in the North Sea as closely held First Oil Expro Ltd. went into administration.
KPMG LLP was appointed administrator of First Oil Expro by the producer’s Aberdeen, Scotland-based parent company First Oil Group Plc after a “strategic review of its operations following the sharp falls in the oil price,” the auditor said in a statement Monday.
Oil producers around the world are struggling to adapt to a 70 percent slump in prices since June 2014. North Sea explorers have to contend with some of the highest operating costs in the world and the pace of drilling in the region has sunk to a record low as companies abandon costly projects. The industry is adjusting, with services company John Wood Group Plc cutting rates last weekfor U.K. contractors of one of its subsidiaries by an average of 9 percent.
The Expro “administration process is a reflection of the significant challenges facing U.K. North Sea oil and gas companies in the current oil price environment,” Jim Tucker, joint administrator and restructuring partner at KPMG, said in the statement.
Shortly after their appointment on Feb. 19, the administrators agreed to sell Expro’s interest in a number of assets including subsidiaries First Oil and Gas Ltd. and Antrim Resources NI Ltd. to Zennor Petroleum Ltd., according to the statement.
First Oil and Gas agreed to sell its interest in the Kraken oil field to partners Cairn Energy Plc and Enquest Plc, the companies said Monday. The Kraken project is expected to produce first oil in the first half of next year, according to Enquest.