Out-Law News 1 min. read
Development of largest North Sea gas field 'for a decade' gets go-ahead
02 Sep 2015, 10:27 am
The largest new field discovered in the North Sea for a decade could produce enough gas to meet 5% of the UK's total demand by 2020/21, the field's lead developer, Maersk Oil, has said.
The UK Oil and Gas Authority (OGA) has now approved development of the high pressure, high temperature (HPHT) Culzean field in the North Sea, and production is expected to begin in 2019, according to Maersk. The company and partners JX Nippon and BP (Britoil) will invest around £3 billion in the development, with more than 50% of that investment committed to the UK supply chain, Maersk said.
UK chancellor George Osborne said that the announcement "sends a clear signal that the North Sea is open for business".
"Already the UK's oil and gas industry supports hundreds of thousands of jobs across the country and this £3bn investment comes on the back of massive government support for the sector," he said.
"Despite challenging times, this government has backed the oil and gas industry at every turn, introducing a vital package of support to help it to protect and create jobs," he said.
Maersk said that the development would benefit from the new allowance announced by the government at the 2014 Autumn Statement to support investment in HPHT projects. A HPHT field pumps gas at extreme pressure and high temperatures, making it technically difficult and more expensive to exploit than other oil and gas fields.
The Culzean field was discovered by Maersk and its partners in 2008 and holds the equivalent of an estimated 250-300 million barrels of oil (boe). Once established, production is expected to continue for at least 13 years. The field will produce 60,000-90,000 boe per day at peak production, Maersk said.
According to the announcement, the project will support an estimated 6,000 jobs in the UK supply chain and create more than 400 direct jobs.
OGA chief executive Andy Samuel said that the announcement was "excellent news for the UK during a period when the decline in global oil prices has created difficult operating conditions for this critical sector of our economy".
"The OGA has worked closely with Maersk Oil and HM Treasury on the development plans for the Culzean field, which will support many new contracts in the oil and gas supply chain across the UK," he said.
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