Cyberjaya, 11 April 2022 - Dagang NeXchange Berhad (“DNeX”), via its 90 percent-owned subsidiary Ping Petroleum Limited (“Ping”), has passed a key milestone after receiving a letter of “no objection” from the North Sea Transition Authority (“NSTA”) in relation to the company’s proposed development concept for the Avalon discovery in the Central North Sea, United Kingdom (“UK”).

Ping had last year announced the purchase of the remaining 50 per cent interest in UK North Sea Block 21/6b, License P.2006, containing the Avalon Oil Development from Summit Exploration and Production Limited, a wholly-owned subsidiary of Sumitomo Corporation, bringing Ping’s ownership in the licence to 100 per cent.

The company will now finalise conceptual development planning and begin Front End Engineering works in preparation to submit the Avalon Field Development Plan, with Final Investment Decision (“FID”) anticipated later this year.

With a total estimated recovery of 23 million barrels of oil, production from Ping’s second oilfield asset is scheduled to begin between mid 2024 and mid 2025, subject to availability of key materials and equipment.

Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX, said that receiving “no objection” to the proposed development concept represents a material opportunity to expand and diversify Ping’s portfolio of oil assets in full accordance with the UK’s production and emissions-reduction targets.

He said the concept comprises tie-back of Avalon production wells to a re-used Floating Production Storage and Offloading facility (“FPSO”), which has spare ullage to provide an offtake route for nearby stranded discoveries. He added that discussions are ongoing with the UK regulator and supply chain to decarbonise the development through integration with Floating Offshore Wind.

“The next step for Ping is to submit the company’s field development plan for Avalon to NSTA by the next quarter. Once approval is attained, the company will proceed with the full development programme” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.

He said the Avalon field is planned to produce at initial rates of 20, 000 barrels of oil per day, providing a material increase in production and diversifying the asset base.