Oil giant BP will spend £1.7billion on North Sea projects in 2012, the most in a decade, it said yesterday.
The group’s North Sea boss, Trevor Garlick, said, however, the biggest focus would still be on improving reliability.
Speaking as BP announced worldwide capital spending of £13.9billion in 2012, Mr Garlick said capital spending in the North Sea would be £1.7billion, up from £1.5billion in 2011, with £1billion earmarked for the UK North Sea.
Three of BP’s six major upstream projects with higher margins worldwide will be starting up in the North Sea this year.
The region is also home to the big fields in deep water – including Schiehallion, Clair and Valhall – announced yesterday as being a key focus for the group by chief executive Bob Dudley, driving the record spending and recruitment.
Last year, the firm took on 500 extra people into its North Sea business, onshore and offshore, and it said yesterday it still needed engineering, operations, subsurface and well experts.
Regional president Mr Garlick said, however: “Our biggest focus in the short term is to improve the reliability and operating efficiency of our key infrastructure, to ensure we deliver on our production targets safely and consistently. We are very active in developing a long-term future for the North Sea business, with a clear drive to invest in high value assets with growth potential.
“This year we plan to invest around £1.7billion in the business, double the amount of five years ago, and will start production from three major projects – the Devenick gas project in the central North Sea and the Skarv and Valhall redevelopment projects in Norway. We are also continuing to invest in technologies that allow increased oil recovery from our reservoirs and better seismic imaging so that we are fully aware of the potential that exists.”
Most the cash is being spent on development work. Of 24 wells being drilled by BP in the North Sea, nine are in UK waters. One is an exploration well, on North Uist, north-west of Shetland, which had been delayed following the Macondo disaster.
The others are development wells, mostly on Magnus and Clair.
The rest are off Norway and are also mostly development drilling, except an exploration well on the Snadd Outer field in the Norwegian Sea.
It is hoped the new developments will help to net BP an average of 217,000 barrels of oil equivalent per day in production for the North Sea in 2012, with about 40,000 of that off Norway, an increase on lower 2011 results.
The firm has yet to sell off its southern North Sea assets, put up for sale this time last year, however, it completed the sale of its Wytch Farm oil field in England to Perenco before Christmas.