The largest hydrocarbon field found in the UK North Sea for more than a decade has been approved for development, Maersk Oil reported Monday. With $4.6-billion expected to be invested in the development it will support an estimated 6,000 UK jobs and create more than 400 jobs directly connected to the field.
Discovered in 2008 by Maersk Oil and its partners, the Culzean gas condensate discovery is a high-pressure, high-temperature (HPHT) field that has resources estimated to produce enough gas to meet five percent of total UK demand when it hits peak production in 2020/2021. The field is also the largest field sanctioned in the UK since East Brae in 1990.
Welcoming the news, Maerk Oil CEO Jakob Thomasen said in a statement:
“Culzean is an important development for the UK and also for Maersk Oil and our co-venturers. We are pleased the field will support UK economic growth as well as extend understanding of HPHT development. Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK – reflecting our commitment to the future of the North Sea region.”
One of the reasons that the field is going ahead is because of an HPHT Cluster Area Allowance that was introduced by the UK government as part of its 2015 Budget. Commenting on this Monday, UK Chancellor of the Exchequer George Osborne said:
“Today’s announcement sends a clear signal that the North Sea is open for business. Already the UK’s oil and gas industry supports hundreds of thousands of jobs across the country and this GBP 3 billion ($4.6 billion) investment comes on the back of massive government support for the sector. Despite challenging times, this government has backed the oil and gas industry at every turn, introducing a vital package of support to help it to protect and create jobs.”
Speaking on behalf of the industry itself Oil & Gas UK Chief Executive Deidre Michie also welcomed the news, saying in a statement:
“Maersk Oil’s Culzean field is expected to produce enough gas to meet five percent of total UK demand at peak production. This is positive news indeed, as according to figures from the Department for Energy, the country’s primary demand for oil and gas, critical for our transport and heating and powering our homes, will remain unchanged until 2030 at least.
“This investment by Maersk Oil and its co-venturers, in this technically-demanding high-pressure, high-temperature field, is very encouraging at this challenging time for the industry and reinforces the fact that the UK Continental Shelf continues to have much to offer.”
Culzean is estimated to hold gas condensate reserves of between 250 and 300 million barrels of oil equivalent. Production is expected to start in 2019 and continue for at least 13 years with plateau production of between 60,000 and 90,000 barrels of oil equivalent per day.