BP's £4.5bn belief in the future or North Sea oil

OIL giant BP said the story of North Sea oil still has a long way to run after the company got the go-ahead for a major £4.5bn project.

An artist's impression of Clair Ridge
An artist's impression of Clair Ridge

OIL giant BP said the story of North Sea oil still has a long way to run after the company got the go-ahead for a major £4.5bn 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.

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 that the projects will provide 3,000 UK oil and gas supply jobs and play a part in sustaining the 3,500 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, 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 £700m 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. Dudley added: “After some years of decline, we now see the potential to maintain our production from the North Sea at around 200,000-250,000 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.”

Prime Minister David Cameron said: “I am delighted to give the go-ahead for this project. This investment is great news for Aberdeen and the country and provides a massive boost for jobs and growth.

“It shows the confidence that there is to invest in the North Sea. We have cutting-edge technology, world-class skills and expertise and a UK Government that is committed to do what we can to secure future investment.”

Cameron hopes oil companies will partner universities to “reset” academic predictions about the future of the UK oil industry.

Cameron said he wants to “free up universities and allow them to choose what courses they want to teach”, and encouraged oil firms to “get a bit of a rethink in our universities”.

George Rafferty, chief executive of North East oil sector body NOF Energy, said: “The development of the Clair Field by BP and its partners sends a clear message that North Sea Oil & Gas will continue to play a major part in delivering a balanced energy supply for the UK for many years to come.

“It will open up considerable new opportunities for North East companies, which have an established position in the oil and gas supply chain for providing exceptional products, skills and technologies to North Sea operations.”

 
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