MAERSK Oil highlighted its enthusiasm for the UK North Sea after winning Government approval for the £150 million development of the Balloch oil field 140 miles north-east of Aberdeen.

The Danish oil and gas firm said the Balloch development is one of a number of UK exploration and development projects that it is fully committed to bringing onstream in the coming years.

With estimated reserves of nine million barrels oil, assuming a two-well development, the field is relatively small. However, the project reflects the advantages firms enjoy when developing assets close to existing production infrastructure.

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The company expects to make quick progress by tying the Balloch field back to a floating production storage and offloading facility that is producing oil from its Dumbarton and Lochranza assets. A division of the AP Moller-Maersk shipping giant, the oil and gas firm expects to start production from the first Balloch well in April at 8000 barrels oil per day.

It plans to develop a second well to maximise production from the field.

Martin Rune Pedersen, managing director of Maersk Oil UK, said: "Our investment in the Balloch field is part of Maersk Oil's ambitious long-term growth strategy in the UK.

"We have a strong portfolio of development and exploration projects, and are fully committed to bring these onstream in the next five to seven years."

UK Energy Minister John Hayes said: "Balloch is an excellent example of a smaller field using existing infrastructure. This type of development will become increasingly important for maximising oil and gas recovery."