Green light for £1.6bn North Sea project
24 Oct 2012
London - The UK government has approved a Talisman Energy project that, it says, will extend the life of North Sea oil fields and generate millions of pounds of extra investment in the UK economy.
The £1.6-billion MonArb Area Redevelopment Project will mean the production of a further 100 million barrels of oil equivalent from the existing Montrose, Arbroath, Brechin, Arkwright, Carnoustie and Wood fields. The project also includes consent for the new Cayley and Shaw fields.
The project will create or sustain more than 2,000 UK jobs within the fabrication, construction, installation, subsea engineering and drilling sectors, said the UK department of energy and climate change (DECC).
The first major contract for a UK company, worth more than £50 million, has been awarded to Newcastle-based Offshore Group Newcastle Limited (OGN Group), for the engineering, procurement and fabrication of the jacket, the drilling rig’s base.
Talisman’s investment marks the start of a new wave of interest in North Sea oil, according to energy minister John Hayes.
“The North Sea has been a bedrock of the UK economy, creating jobs, investment and energy security for nearly 50 years. We must do all we can to prolong the economic life of our oil rich seas and make the most of this precious resource,” said Hayes.
The government’s Brown Field Allowance, which shields a portion of income in qualifying fields from ‘supplementary charge’ taxation, was key to the project.
“By creating tax allowances that allow us to get the most of this vital national resource, we are supporting skilled job creation,” said Sajid Javid, the UK’s economic secretary.
The development comes following work with Talisman as part of the DECC’s efforts to ensure the full economic development of existing oil fields.
DECC also worked with Talisman to secure the new investment in Cayley and Shaw by allowing short licence extensions, with deadlines to achieve specified targets.
