Brakes off oil & gas investment
18 Feb 2013
London - The UK government’s Department of Energy and Climate Change (DECC) has approved a field development plan by Statoil and its co-venturers for the Mariner heavy oil field.
The project entails investments of more than $7 billion and is the largest new offshore development in the UK in more than a decade.
Statoil expects to start production from Mariner in 2017, and the field is expected to produce for 30 years. The average production is estimated at around 55,000 barrels of oil per day over the plateau period from 2017 to 2020.
“The North Sea is a core area for Statoil and we look forward to taking a leading role in further developing also the UK part of this basin,” says Helge Lund, president and CEO of Statoil.
Statoil will establish an operations center for Mariner in Aberdeen, and the project will lead to substantial job creation in the region with more than 700 long-term, full-time positions.
The scale of the investment in the the Mariner heavy oilfield highlights the strength of current activity in the sector and the continuing importance of oil and gas to the economy, according to , Mike Tholen, Oil & Gas UK’s economics director.
“Mariner requires pioneering technology and its development is creating hundreds of high-skilled, long-term jobs across Britain,” he said. Constructive engagement with the Treasury on the tax regime has in part enabled this development.”
Indeed, Mariner is just the latest in a series of majpr UK oil & gas projects to have gained approval in recent months. Many of these are being linked to changes to the tax treatment of North Sea assets.
Tax change has been cited as a catalyst for investment by several major players, including Abu Dhabi National Energy Co. (TAQA), which is to purchase assets worth more than $1 billion from BP. The deal is set to increase TAQA’s daily net production by around 21,000boe, and give it a second major hub in the UK North Sea.
Likewise, JX Nippon Exploration and Production (UK) said the new UK tax regime had prompted it to acquire a number of interests in UK oil and gas fields.
Executive director David Nash said: “Field allowances and steps being taken by the government to provide certainty on decommissioning tax relief contributed to our decision to proceed with this acquisition.”
Meanwhile, Dana is to proceed with a $1.6bn, nine-well Western Isles development, which is expected to produce more than 40,000boe, adding more than 30,000 barrels to its daily production from 2015.
“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 CEO.
