Oil firm Nexen Petroleum UK has been given the green light for its £2billion development of the Golden Eagle field in the North Sea.
It is expected to produce an estimated 140million barrels of oil equivalent (boe) – gross – of proved and probable reserves over an 18-year period.
First oil is forecast for late 2014 and the development is expected to have an initial gross production rate of up to 70,000 boe per day, about 26,000 net to Nexen.
The development includes a combined production, utilities and accommodation platform linked to a separate wellhead platform.
Detailed design engineering has started on the project and fabrication is due to start in late 2011 – a statement from the firm did not say where.
Earlier this year, it was reported the platform construction contract had been awarded to a firm in the United Arab Emirates.
However, Nexen said today more than two-thirds of the contracts for products and services for Golden Eagle were to be sourced in the UK.
It is understood the UK Government took a close interest in where contracts for work would be awarded.
“This is a great day for the UK oil and gas industry,” said Nexen Petroleum UK managing director Phil Oldham, adding: “Regulatory approval marks a major milestone in the development of Golden Eagle, which is one of the largest oil discoveries in the UK North Sea since our Buzzard discovery.”
The Golden Eagle development encompasses both the Golden Eagle and Peregrine reservoirs located in central North Sea blocks 20/1N, 20/1 and 14/26a, about 43miles from Aberdeen.
Some 20 development wells (16 platform-based and four subsea) will be drilled. The development will also include associated in-field and export pipeline infrastructure.
Pipeline and subsea installation is expected to begin in early 2013, to be followed by drilling later that year.
Nexen’s share of the cost will be about £750million.
During construction, the Golden Eagle development is expected to create employment for more than 2,000 workers. Once operational, the facility is expected to employ more than 400 people and provide thousands of indirect jobs throughout its 18-year production life.
Nexen said: “More than two-thirds of the contracts for products and services for Golden Eagle are to be sourced in the UK, a total benefit estimated at more than £1.4billion.
“Nexen holds significant acreage adjacent to the Golden Eagle development and continues to explore and appraise the UK North Sea to identify future opportunities and potential synergies with the Golden Eagle infrastructure.
“This includes participating in an active UK North Sea exploration and appraisal campaign and investing in other development projects in the region.”
The firm is a subsidiary of Canada-based Nexen.
Approval was awarded by the Department of Energy and Climate Change.
Nexen is the second largest oil producer in the UK. In 2010, the company’s UK-based business produced approximately 110,000 boe per day, primarily from the Buzzard field.
Nexen currently employs about 1,200 full-time and contract staff at its offices in Uxbridge and Aberdeen, and at its offshore facilities.
Nexen is operator of Golden Eagle and holds a 36.54% interest in the field alongside partners Maersk Oil North Sea UK (31.56%), Suncor Energy UK (26.69%) and Edinburgh Oil and Gas (5.21%).
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