BP has revealed the story of North Sea oil will run for at least another 40 years after receiving the go-ahead for a major £4.5 billion project.
The second phase of the giant Clair field, west of the Shetland Islands, forms part of £10bn being spent on four projects by BP and its partners from Shell, ConocoPhillips and Chevron over the next five years, bringing an end to several years of decline in the industry.
At £4bn, BP’s involvement represents the highest level of annual investment the company has made in the UK North Sea.
BP chief executive Bob Dudley said: “Although it began more than 40 years ago, the story of the North Sea oil industry has a long way yet to run. BP has produced some five billion barrels of oil and gas equivalent so far from the region and we believe we have the potential for more than three billion more.”
At their peak, it is expected the projects will provide 3000 UK oil and gas supply jobs and play a part in sustaining more than 3500 jobs already existing in BP’s North Sea operations.
Prime Minister David Cameron said the Clair Ridge project, which received the go-ahead from the Government yesterday, would provide “a massive boost for jobs and growth”.
Earlier this year, BP and its partners announced plans for the £3bn redevelopment of the Schiehallion and Loyal fields, west of Shetland, and the £700 million development of the Kinnoull field in the central North Sea.
Alongside development drilling and a number of smaller schemes, the four projects represent almost £10bn of new project investment by BP and its partners into the UK Continental Shelf over the next five years.
Aberdeen-based BP operates around 40 oil and gas fields, four onshore terminals and a network of pipelines that transport almost half of the UK’s oil and gas production.
Mr Dudley added: “After some years of decline, we now see the potential to maintain our production from the North Sea at around 200,000 to 250,000 barrels of oil equivalent a day until 2030.
“And we are working on projects that will take production from some of our largest fields out towards 2050.”
Mr Cameron added: “This investment is great news for Aberdeen and the country and provides a massive boost for jobs and growth. It shows the confidence there is to invest in the North Sea.
“The oil and gas industry is not only important for our energy security, but is a major source of jobs and is vital for future economic growth. There is still massive opportunity in the North Sea.”
Asked if he thought the development of a new project off Scotland would bolster the SNP’s claim for independence, he said: “The whole of the UK has invested in the North Sea and the whole of the UK should benefit. I don’t agree with Alex Salmond’s separation agenda.
“I think the benefits of North Sea oil and gas have flowed to the whole of the UK and I think we are stronger together than we are separately.”
Mr Salmond welcomed the announcement, saying: “This massive investment confirms the offshore industry has a key role to play in generating jobs, skills and revenue for decades to come.
“With up to 40% of oil and gas reserves still to be extracted and well over half of the revenues still to be generated, the UK Government needs to give more certainty to the industry and restore confidence that has been badly dented by the Treasury’s conduct this year.
“As today’s announcement demonstrates, there is plenty of life left in the industry.”
Environment campaigners said the announcement showed an “utter contradiction” in the Government’s policies on energy.
Vicky Wyatt, from Greenpeace, said: “While Chris Huhne likes to portray himself as the good green guy of the Cabinet, all those around him are pledging the UK to a dirty-fuel future that will do only one thing --increase CO2 emissions and cause irreparable damage to the environment.”
WWF Scotland director Dr Richard Dixon said: “BP was responsible for the world’s worst oil spill, so this decision puts at risk the marine environment west of Shetland and all those who depend on it for a living. Talk by our politicians about expanding our use of oil and gas is nothing short of reckless and is at odds with our needs to reduce our reliance on fossil fuels.”
