Dana gets all-clear for $1.6bn oil & gas project

London – The UK department of energy and climate change (DECC) has approved a Western Isles project to develop two discovered oil fields – Harris and Barra – in the northern part of the North Sea, 160km east of the Shetlands and 12km west of the Tern field.

The Harris and Barra fields are estimated to contain recoverable oil reserves of over 45million barrels.

The DECC also approved Dana as operator of the Western Isles development project which is a joint venture between Dana with an equity share of 77%, and Japanese upstream exploration and production company Cieco, which holds the remaining 23%.

The nine-well Western Isles development is expected to produce more than 40,000 barrels of oil equivalent, adding more than 30,000 barrels (net) to Dana’s daily production when it comes onstream in 2015.

The green light for this project follows tax measures announced by HM Treasury during 2012 that are helping to support and increase investment in the North Sea.

“The Western Isles project is at the heart of our growth strategy. Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016,” said Dr Marcus Richards, Dana’s group chief executive.

Equally buoyant was Oil & Gas UK chief executive Malcolm Webb, who said: “Projects like these will help to boost production and stem the decline we have seen in recent years, so helping the full economic benefit of our reserves, in terms of jobs and tax revenues, to be realised.

“Government recognition of the importance of our oil and gas production for the economy and Britain’s energy security and close engagement with the Treasury has resulted in a raft of new projects being announced on the UK continental shelf.

Webb, however, cautioned that exploration is still “worryingly low” and more Should be done to reverse the production decline. Oil & Gas UK, he said, is working with the DECC to address these issues.

For the Government, economic secretary to the treasury, Sajid Javid commented: “The North Sea is a vital national asset, with oil and gas production supporting a third of a million jobs.”