BP has this morning announced that its massive Clair Ridge project west of Shetland has been given the green light by the UK Government.
It is to be developed in a £4.5billion project in partnership with Shell, ConocoPhillips and Chevron.
The Clair Ridge project marks the second phase of development of the giant Clair field.
BP said that, together with three other new oil and gas projects being developed by it and its partners, amounted to a total investment of almost £10billion in the UK’s oil industry over the next five years.
BP’s share of that at about £4billion – the highest level of annual investment the company has ever made into the UK North Sea.
BP said at their peak, taken together, the projects would provide some 3,000 UK oil and gas supply chain jobs, and will play a major part in sustaining the more than 3,500 jobs already existing in BP’s North Sea operations.
Its chief executive Bob Dudley is due to speak in Aberdeen today about BP’s upcoming investment, more than half of which is expected to be spent in the UK.
UK Prime Minister David Cameron said: “I am delighted to give the go-ahead for this project; this investment is great news for Aberdeen and the country and provides a massive boost for jobs and growth.
“It shows the confidence that there is to invest in the North Sea – we have cutting edge technology, world class skills and expertise and a UK Government that is committed to do what we can to secure future investment.”
BP said over the next few years, it will be bringing on stream more new major project developments in the UK than it has ever done over a comparable time period.
“Although it began over 40 years ago, the story of the North Sea oil industry has a long way yet to run. BP has produced some five billion barrels of oil and gas equivalent so far from the region and we believe we have the potential for over three billion more,” said Mr Dudley.
“After some years of decline, we now see the potential to maintain our production from the North Sea at around 200,000-250,000 barrels of oil equivalent a day until 2030. And we are working on projects that will take production from some of our largest fields out towards 2050.”
The Clair Ridge project, which will install two new bridge-linked platforms with the capability to produce an estimated 640 million barrels of oil, is planned to come on stream in 2016 and to extend production from the greater Clair area to 2050.
In addition to the 600 people already working on the project, it will provide hundreds of UK engineering, drilling and oilfield services jobs over the field’s life.
The Clair partners also today announced the successful appraisal of an extension to the Clair field – South West Clair – confirming the overall Clair field complex’s status as the UK’s largest hydrocarbon resource with more than seven billion barrels of oil and gas initially in place.
The appraisal well also encountered a significant new hydrocarbon column in an overlying reservoir horizon, which is expected to support further development of the greater Clair field area in the future.
In the central North Sea, with partner RWE, BP’s £550million development of the Devenick gas field recently passed a significant milestone when its 600 tonne module was successfully lifted onto Marathon Oil’s East Brae platform.
At its peak the project has provided more than 1,000 design, engineering, construction and commissioning jobs and once it comes on stream in 2012 it is expected to supply up to 3% of the UK’s gas needs.
Earlier this year, BP and its partners also announced plans for the £3billion redevelopment of the Schiehallion and Loyal fields, west of Shetland, and the £700million development of the Kinnoull field in the central North Sea.
Together with development drilling and a number of smaller schemes, these four projects represent almost £10billion of new major project investment by BP and its partners into the UK continental shelf over the next five years.
The four BP-operated North Sea projects are part of a wave of new major oil and gas projects around the world that BP expects to come on stream over the next five years.
“The efficient management of giant fields such as Clair, using state-of-the-art technology to manage complex reservoirs and increase oil recovery, is an important element of BP’s strategy and one of the key drivers that we see generating value in BP’s upstream business,” said Dudley.
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