EnQuest will forge ahead with plans to pump more than £4billion into its Kraken oil field development.
The North Sea driller confirmed yesterday that its field development plan for the site had been given the green light by the government’s Department of Energy and Climate Change.
The project is the biggest North Sea investment announced this year.
The heavy oil field, located about 125km east of Shetland, will support more than 20,000 jobs during its construction phase, and around 1,000 jobs a year during its 25-year lifespan.
A company spokes-woman said: “We expect Kraken to have a positive impact on jobs in Aberdeen.”
Due to come on stream by 2016/17, Kraken will consist of 25 wells tied back to a floating production storage and offloading (FPSO) vessel.
Malaysia-based Bumi Armada has been awarded the contract to supply and operate the FPSO, marking the firm’s entrance into the North Sea.
Enquest says the vessel will be one of the largest ever built in the UK North Sea, with a storage capacity of 600,000 barrels.
Net peak oil production is expected to be more than 30,000 barrels of oil per day, with gross reserves at the field estimated to be 137 million barrels. The company says the field will boost reserves by about 50%.
“Kraken is a transformational project for EnQuest and we are delighted to be able to proceed with it, working with the government and our partners to maximise the extraction of approximately 140 million barrels of oil in this field, over its 25-year long life,” said chief executive Amjad Bseisu.
Minister for Energy, Enterprise and Tourism Fergus Ewing said the move was “unequivocal evidence of the faith that the oil & gas industry has in the future of the North Sea as an oil-producing province”.
He added: “This is also clear evidence that new opportunities still exist in the sector. Scotland’s industry-led Oil and Gas strategy sets out an overall theme of maximising resource recovery through a focus on industry-led innovation, skills and supply chain growth. With up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, more than half of the resources in the North Sea, by value, still to be extracted, it is clear that the industry will make an important contribution to the Scottish economy for decades to come.”
Kraken will be Enquest’s sixth production hub in the UK North Sea. The company is operator with a 60% stake, with Cairn Energy holding 25% interest and First Oil holding the remaining 15%.