North Sea £4bn heavy oil project approved
19 Nov 2013
Oil developer EnQuest has approved a £4 billion investment in a new North Sea project east of the Shetland Islands.
The investment into the development of the 137-million-barrel Kraken heavy oil field was confirmed on Friday by EnQuest, which holds a 60% stake in the project and will operate it.
It is the largest investment in the UK North Sea to be announced in 2013, which has been a record year for offshore oil and gas investment in this country.
The Kraken development, located in the East Shetland basin, has two separate heavy oil fields, both of which will benefit from heavy oil allowances. These are tax exemptions worth £800 million each, which have been introduced by the Government to stimulate investment in the North Sea.
“It is only by combining our skills and expertise with fiscal incentives, such as heavy oil allowances, that really substantial projects like Kraken are possible,” said EnQuest chief executive Amjad Bseisu.
EnQuest’s development partners on the project are Cairn Energy and First Oil, who between them hold the remaining 40% equity and have made investment commitments to Kraken in addition to EnQuest’s £4 billion.
Kraken is expected to have a 25-year production life, with gross peak oil production expected to be over 50,000 barrels of oil per day. First oil production is due in 2016/2017.
