Oil and gas firm CNR International said yesterday it was to invest about £300million to extend the life of one of the oldest fields in the North Sea.
The company, part of Canadian Natural Resources, said it was spending the money on its east-of-Shetland Ninian field after the UK Government approved an application for a brownfield allowance.
CNR added that its plans for Ninian – about 240 miles north-east of Aberdeen – would protect and create jobs, add reserves and extend the field’s economic life by at least six years.
It was unable to say how many new jobs there could be, but it expects the extra production – about 27million barrels of oil equivalent – to keep thousands of workers employed longer.
The field life extension will also deliver further work to the energy supply chain, benefiting service firms throughout the north and north-east.
CNR’s plans for Ninian include four new production wells, four injectors and two well upgrades.
The company said it may commit to further investment in its North Sea assets if other brownfield allowance applications were successful.
CNR International managing director James Edens said: “We forecast that the company’s North Sea production will increase in the coming years.
“With the assistance of the brownfield allowance, we are now able to embark on this phase of Ninian’s late-life extension programme, realising remaining reserve potential and extending field life.
“Ninian is a further example of how we are able to recover more oil from mature assets through a combination of innovative ways of working and technical expertise.
“It also demonstrates the benefits of the brownfield allowance and reinforces CNR International’s long-term commitment to the North Sea.”
Sajid Javid MP, the economic secretary to the Treasury, said: “This is very positive news and demonstrates how the government’s package of changes to the oil and natural gas tax regime, including the introduction of brownfield allowances, is stimulating significant investment, supporting jobs, delivering revenue for taxpayers and helping ensure we make the most of this valuable national asset.”
Mike Tholen, economics and commercial director at industry body Oil and Gas UK said CNR’s announcement “reinforces the importance of continued constructive engagement between the industry and Treasury to ensure that the recovery of the UK’s oil and gas resources is maximised in the coming decades”.
The brownfield allowance scheme provides tax incentives for investment in existing North Sea fields which meet set government criteria, helping more developments to proceed.
NINIAN FIELD: FACTFILE
Ninian was discovered by Chevron in 1972 but not announced until January 1973.
Chevron assessed reserves at some 3billion barrels of oil, with 1.2billion deemed recoverable.
Development based on three platforms and an export pipeline to Sullom Voe, in Shetland, was rapidly implemented, with the result that first commercial oil was achieved on December 23, 1978 – nearly 35 years ago.
Chevron sold the asset to Oryx, which was acquired by Kerr-McGee in 1998, and it, in turn, sold Ninian to Canadian Natural Resources (CNR) in August, 2002.
CNR says its long-term objective for the North Sea is to stabilise production and plan for modest growth, with mature field declines offset by development projects and infill drilling.
It also anticipates significant acquisition opportunities where it can capitalise on “mature basin expertise”.
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