Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Royal Dutch Shell will pile fresh investment into a new North Sea project for the first time in six years to increase its UK oil production by a third.
The oil major gave the go-ahead to expansion plans for the Penguins oil field in the Northern North Sea. which will use a floating storage and production vessel to pump 45.000 barrels of oil a day from the field once it reaches its peak production rate. adding to its existing 135.000 barrel a day production.
The oil can be produced at a cost of $40 a barrel. handing Shell a high return on its sales amid global market prices of almost $70 a barrel.
Andy Brown. who runs Shell’s upstream oil and gas business. said the project is “another example of how we are unlocking development opportunities. with lower costs.“
Shell sold off around half of its North Sea assets to a private equity backed producer. Chrysaor. for around £2.4bn this time last year. However. the oil major has consistently argued that it is not retreating from the North Sea.
Steve Phimister. Shell’s UK and Ireland upstream boss. said the group plans to grow the oil production “in one of Shell’s heartlands“ through the core production assets still remaining after the mega-sale.
The vessel will be based 150 miles off the north east coast of the Shetland Islands and marks Shell’s first manned offshore installation in the northern North Sea in almost 30 years.
The new crude flows follow a ten-year high for new oil and gas projects in the North Sea last year. after the basin slashed its costs in half. to weather the oil market downturn.
Deirdre Michie. head of Oil and Gas UK. said the investment decision shows “the investment potential the UK continental shelf still holds“.
“We are hopefully entering a more positive phase for our industry in the UK with new projects on the horizon that I hope will bring a much needed boost for companies in the supply chain.“ she added.
Elsewhere in the North Sea. BP’s Norwegian spin-off said it would boost its shareholder payouts by $100m to $450m next year. Aker BP said it has “a clear ambition“ to raise the payouts by £100m each year to 2021 ahead of a cash flow boom due to lower costs and rising oil market prices.
The group was formed in 2016 after BP agreed to merge BP Norge with Det Norske Oljeselskap to create one of Europe’s largest independent player in Europe.
Shares in Aker BP rose over 4pc on the Oslo Stock Exchange to 22.96 Norwegian kroner (£2.10)
