Oil explorer plays down debt scare
Enquest dismisses ‘government support’ claims
Oil company EnQuest has issued a dismissive response to claims at the weekend that the UK government is ready to step in with support amid the threat of a low oil price-induced bankruptcy crisis in the region.
The Telegraph reported that the Oil and Gas Authority (OGA), which was formed to safeguard a long-term future for the North Sea, is concerned about EnQuest.
The government’s concern was said to focus on the company’s majority stake in the huge Kraken oilfield in the North Sea, one of the region’s largest new projects.
It was claimed that Enquest, which was carved out of Petrofac, and Premier Oil are “wracked with debt” following the oil market rout and now stand at the mercy of their lenders.
However, Enquest has today played down the importance of any discussions with the government. In a tersely-worded statement it says:
“Enquest notes The Telegraph article at the weekend about the UK Oil and Gas Authority’s possible North Sea contingency plans.
“EnQuest routinely engages with the OGA and with the UK and Scottish Governments on industry matters, but is not involved in any company-specific discussions such as were implied by the article.”
The alarm appeared to be raised over the firm’s 20 per cent decrease in full-year core earnings, as it was forced to write down about $626 million (£433m) on the value of some of its assets due to the oil price slide. Around that time its credit rating was downgraded deeper into junk status by Moody’s Investor Services.