NORTH Sea-focused IOG has started production from a second field in the space of three days amid the surge in gas prices fuelled by Russia’s assault on Ukraine.
IOG said it had produced first gas from the Elgood field in a move it noted would boost flows into the UK market.
The company started production from the Blythe gas field on Monday.
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The fields form part of a development that IOG won backing for from US billionaire Warren Buffett.
The start of production from the fields will allow IOG to capitalise on the increase in gas prices seen in recent weeks while helping the UK to reduce its reliance on imports.
Jonathan Wright at IOG’s house broker finnCap said the company’s output could displace Russian supplies and higher carbon imports of liquefied natural gas.
“Developing further UK gas resources is the right thing to do both from an environmental and energy security perspective,” said IOG ‘s chief executive, Andrew Hockey.
He added: “We are encouraged by the recent government discussions with industry and ministerial comments on supporting further investment in domestic gas supply.”
Boris Johnson held talks with oil and gas company bosses on Monday. Reuters reported he discussed ramping up investment in the North Sea and boosting the supply of domestic gas.
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Scotland’s energy minister Michael Matheson told MSPs last week the country should decarbonise at a faster rate in response to the Ukraine crisis.
IOG is set to generate significant revenues from its North Sea production.
The group set out to win backing for its Southern North Sea development project during a deep downturn in the industry. The project involves finds that other firms had left idle.
In 2019 Mr Buffett’s CalEnergy Resources paid £40 million for a 50 per cent stake in the project and agreed to cover up to £125m of the group’s costs.
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