Oil and gas operator Nexen said yesterday it was ready to proceed with the development of Golden Eagle in the UK North Sea.
The Canadian company said boardroom approval to progress Golden Eagle was a “significant step forward in advancing our plans to deliver value from our portfolio of development opportunities”.
Nexen, whose interests in the UK North Sea also include the giant Buzzard field, said Golden Eagle would be a two-platform standalone facility, with production capacity of around 70,000 barrels of oil equivalent (boe) per day.
About 25,500 boe per day would be net to Nexen, which has a 36.5% working interest in the project.
The firm added: “Assuming partner and regulatory approval is granted, project sanction is expected in mid-2011. First oil is expected in late 2014.”
Golden Eagle, with estimated recoverable resources of 150million barrels of oil equivalent, is the largest oil discovery in the North Sea since Buzzard. Nexen president and chief executive Mark Romanow said Golden Eagle, which is close to Buzzard, was a key component of the company’s growth plan. He added: “This project is economically attractive at oil prices much lower than today.”
Nexen said the total cost to develop Golden Eagle was nearly £2billion, with its share at about £723million.
“This investment continues to be attractive despite the decision of the UK Government to increase the tax rate levied on oil and gas activities,” the firm added.
Mr Romanow warned the government’s decision to raise taxes would discourage new investment but Nexen’s near-term plans for the UK North Sea remained “robust” due to the size and quality of its discoveries.
Nexen, which is also making progress with two tieback projects at Telford and Blackbird, reported a 43% year-on-year rise in first quarter profits to £127.8million.