CHEVRON, the US oil and gas giant, has provided a vote of confidence in the UK North Sea by giving the go-ahead for the development of the Alder field 100 miles off Scotland.

The company has decided to proceed with a development scheme that will involve it operating in challenging conditions and an outlay of more than £200 million.

UK Energy Minister Michael Fallon said: "Developments like Alder confirm the basin is still vibrant with many opportunities."

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He noted the proposed development features one of the most complex wells to be drilled in the North Sea.

Chevron highlighted the role tax breaks played in persuading the company to sanction the investment required to develop the high pressure, high temperature reservoir. Alder was discovered in 1975.

Craig May, managing director of Chevron Upstream Europe, said the development would be helped by the enhanced Small Field Allowance introduced by the UK Government in 2012.

Chevron's decision to proceed may provide reassurance it still sees potential to make profitable investments in UK waters, though operators have faced cost rises amid buoyant activity levels in the area.

In November, Chevron said its planned £6 billion Rosebank development, 80 miles west of Shetland, was not currently economically attractive. The company has said it is still in the design phase of Rosebank.

First production from Alder is expected in 2016. Chevron awarded contracts worth around £200m connected with the development to UK suppliers in 2013.