A North Sea firm has started production from a landmark development that won backing from US billionaire Warren Buffet.

IOG said it has produced first gas from the Blythe field in what the Oil and Gas Authority described as a positive development for the UK, amid concern about the potential impact of the fallout from the Ukraine war on supplies.

“As the UK transitions to net zero it will need a stable and secure supply of domestic gas to reduce its reliance on imports, which often have a larger carbon footprint,” said the regulator.

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Jonathan Wright at IOG’s house broker finnCap noted the start of production will allow the firm to capitalise on the surge in gas prices in recent months, which gained fresh impetus following Russia’s assault on Ukraine.

“The gas price windfall that IOG is set to reap will put it in a stronger position to pursue not only the additional growth opportunities within its portfolio, but also to start considering acquisitions,” said Mr Wright.

He added: “ A strategic gas infrastructure position alongside strong cash flow should open up new opportunities. First gas is just the start.”

Blythe forms part of a project that includes a range of finds in the Southern North Sea that were left undeveloped by other firms.

HeraldScotland: IOG chief executive Andrew HockeyIOG chief executive Andrew Hockey

With other fields set to enter production in coming weeks IOG, which used to be known as Independent Oil and Gas, is in line to be rewarded for spotting their potential and persevering with its plans amid challenging market conditions.

Many firms slashed investment in the North Sea during the long downturn triggered by the slump in oil prices from 2014 to 2016.

In 2019 the CalEnergy Resources business owned by Mr Buffet’s Berkshire Hathaway paid £40 million for a 50 per cent stake in IOG’s project and agreed to cover up to £125m of the group’s costs.

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IOG’s chief executive Andrew Hockey yesterday offered sincere thanks to Berkshire Hathaway and underlined his confidence in the commercial potential of North Sea gas resources.

He said: “ Phase 1 First Gas is just the first step on a bigger journey, giving us the operational platform and financial capacity to deliver multiple further phases of growth. By delivering domestic gas supplies through our co-owned infrastructure … we can generate strong and sustainable returns for shareholders.”

North Sea industry body Offshore Energies UK noted the production hub that IOG has developed could be used to bring other finds onstream.