The UK Government has hailed the beginning of a “new wave” of investment in the North Sea oil and gas industry after approving a £1.6billion scheme.
Talisman Energy’s Montrose area redevelopment project was rubber-stamp-ed yesterday, paving the way for two new fields to be unlocked and an extra 100million barrels of oil to be produced.
It is the first scheme confirmed after the launch of the Westminster Government’s new incentive for brownfield projects, revealed in this year’s Budget in March.
With the UK expected to emerge from recession today, new Energy Minister John Hayes acknowledged that the north-east-based offshore sector had been the “bedrock” of Britain’s economy for decades.
“This significant £1.6billion investment from Talisman marks the start of a new wave of interest in North Sea oil,” he added.
“Together with industry, we are creating a fertile ground for new investment that is in the best interests of the UK. We must do all we can to prolong the economic life of our oil-rich seas and make the most of this precious resource.”
The development approved yesterday will involve the construction of a platform, as well as a bridge linking the existing central North Sea Montrose platform to unlock two fields — Cayley and Shaw.
Shell UK announced earlier this week that it would develop the Fram field, one of its most significant central North Sea developments for a decade and among the largest planned for UK waters.
Chancellor George Osborne was accused of effectively killing off North Sea investment after his shock £10billion tax raid on producers last year. Industry leaders have since said that measures in this year’s Budget on decommissioning and brownfield allowances have created the stability they require.
Speaking after approval of the Talisman scheme yesterday, Sajid Javid, economic secretary to the Treasury, said: “Today’s news is further evidence that the government’s efforts to stimulate investment in the North Sea are paying dividends.
“This is good news not just for the north-east of Scotland, but the whole of the UK.”
Geoff Holmes, senior vice-president of Talisman Energy UK, said: “The Montrose area redevelopment project signals our ongoing commitment to maximising recovery of oil and gas reserves from the UK North Sea, and in doing so, our intention to attract and retain top talent across the industry.”
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