THE biggest gas field discovered in the North Sea for more than a decade has been given the green light to start production in a long-awaited boost for the beleaguered sector.
About quarter of a billion barrels of oil equivalent are believed to be located in the Culzean field east of Aberdeen. It is expected to create more than 400 jobs – and support a further 6,000 UK wide.
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
The announcement provides some welcome respite for Scotland’s flagship North Sea industry, which has been left reeling from thousands of lay-offs in recent months as global oil prices have nosedived.
But the SNP government in Scotland is warning the problems in the sector may not be over without action to help boost dwindling exploration levels.
At peak production in 2020-21, the Culzean field is expected to produce enough gas to meet half of Scotland’s gas needs.
Chancellor George Osborne welcomed the news on a visit to Scotland yesterday, insisting the decision by the UK Oil & Gas Authority to approve exploitation of Culzean is 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 £3 billion investment comes on the back of massive government support for the sector,” the Chancellor added.
“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.”
The field was discovered in 2008 and, with an estimated reserve of 250-300 million barrels of oil equivalent, it is described by Danish operator Maersk as the largest gas field sanctioned for exploitation since East Brae in 1990. Gas is expected to started flowing from the development in 2019 and continue for at least 13 years, with peak production of 60,000-90,000 barrels per day, Maersk Oil said.
Maersk Oil said the project is expected to support an estimated 6,000 UK jobs and create more than 400 direct jobs.
The oil and gas industry is worth £35bn annually to the UK economy, but it has been reeling after a crash in global prices saw them fall from more than $100 a barrel a year ago to less than half that figure.
This has resulted in thousands of job lay-offs and cuts to pay and conditions from oil firms. Just last week, Maersk unveiled plans to axe up to 200 jobs by halting production on its Janice installation in the second half of next year