Shell UK said yesterday it would develop the Fram oil and gas field in the North Sea.
It described Fram as one of its most significant central North Sea developments for over a decade and among the largest planned for UK waters.
Shell said it had received final approval for the project from the Department of Energy and Climate Change (DECC).
The find, 136 miles east of Aberdeen, will use a floating production vessel.
Fram, thought to hold up to 300million barrels of oil and gas, is expected to produce an average of 35,000 barrels of oil equivalent per day. First production is expected within three years and about two-thirds of the output will be gas.
Shell is operator of Fram, with a 32% stake, while Esso Exploration and Production UK holds the remaining 68%.
A Shell spokeswoman would not disclose the development cost for the field, though industry sources say it is likely to exceed several hundred millions pounds. The spokeswoman also said it was too early to say what the job implications could be.
Glen Cayley, Shell’s technical vice-president for Europe, said: “This is an exciting announcement for Shell and a positive demonstration of our commitment to technological innovation as we pursue field developments in the UK.
“Large developments such as Fram will stimulate supply-chain and employment opportunities in this latest phase of development for the UK continental shelf.”
He said Shell was investing about £1.24billion annually in capital projects and operating expenses in the UK and this was set to increase.
Mr Cayley also stressed his company’s continued commitment to Aberdeen.
Energy Minister John Hayes said: “The durability of oil production in the North Sea constantly confounds expectation. It is a tribute to the hi-tech advances and expertise of British industry, which has constantly pushed the boundaries of what can be produced.
“Fram itself will add around 2% to our oil and gas production; securing jobs, creating revenue and adding to our security of supply. This announcement shows that by working with industry and by creating the right fiscal environment, our oil supplies will continue to be an asset to Britain for years to come.”
The development plan contains eight production wells, one production water re-injection well, two subsea drill centres and a subsea flowline bundle.
In June, the Press and Journal reported that Shell had earmarked Dutch firm SBM Offshore for the supply and management of a floating production vessel for Fram.
SBM said the hull of the vessel for Fram would be based on a converted Aframax tanker and incorporate an internal turret permanent mooring system.
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