Nu-Oil's MFDevCo enters collaboration with Marnavi Offshore

Nu-Oil and Gas announced on Friday that Marginal Field Development Company (MFDevCo), its 50%-owned joint venture, has entered into a collaboration agreement with Marnavi Offshore.

The AIM-traded firm said Marnavi was joining MFDevCo as it established strategic collaborations with companies that had the “key capabilities, experience and market position” required to maximise and deliver opportunities being pursued as part of its gas-to-wire initiative for the cost-effective development of marginal gas fields.

MFDevCo would also seek to collaborate with further large engineering companies to participate in providing an integrated gas-to-wire initiative.

In particular, MFDevCo was said to be finalising agreements with companies with experience of operating gas fields and providers of power generation, compression, electrical and automation systems, and expected to be able to confirm such collaborations in due course.

The board said the initiative was a “logical and integral, yet discrete” part of MFDevCo's overall strategy to maximise the recovery and value of resources within fields currently considered stranded or marginal, for whatever reason.

It explained that the characteristics and requirements of gas development projects differed from those of oil development projects, meaning consideration needed to be given to adopting a different approach.

Gas, however, represented a “relatively clean” energy source that could provide a “vital” contribution to energy security, as well as assisting in the transition towards more renewable energy sources.

Marnavi Offshore are the operators of a fleet of vessels, for a privately-owned shipping company established in 1910 that provides services in chemical and foodstuff transportation as well as to the offshore and environmental industries.

Nu-Oil siad Marnavi was able to assist MFDevCo not only through provision of vessels required to support all phases of its projects, from pre-installation through commissioning and operations and finally in decommissioning, but also with other services it was able to bring in through its established relationships.

They included support from Next Geosolutions, a subsidiary of Marnavi Group providing geoscience and engineering support services including seabed mapping and burial assessment services, asset inspection and integrity management, intervention and remedial, as well as cable laying, leasing and inspection, which were critical in minimising risks and maximising returns to investors.

Under the terms of the collaboration agreement, Marnavi will provide information and support to MFDevCo as required to secure gas-to-wire projects identified in return for an exclusive first option to provide certain equipment and services to those MFDevCo projects, on terms acceptable to both parties.

The commitment that Marnavi was making to project evaluation and design was described as “central” to MFDevCo's final confirmation of the technical and economic feasibility of selected projects, and would provide the independent verification required to demonstrate deliverability to both partners and investors.

Nu-Oil said the initial term of the agreement was two years, but both parties were viewing it as the basis for a long-term working relationship with benefits that would increase as working practices were cemented and efficiencies increased going forward.

“We have always been committed to maximising the economic recovery of resources currently considered stranded by whatever means is appropriate and are very pleased to have received support from Marnavi and from other major companies with key capabilities and experience with whom we are currently speaking in our latest initiative to achieve just that,” said Nu-Oil joint managing director elect Alison Pegram.

“There are compelling reasons to adopt this approach on the projects we are currently pursuing and we are working hard to conclude the final elements that will allow us to move forward to delivery.”