Maersk Oil today confirmed it would invest $4.5billion in its high pressure, high temperature Culzean field in the UK Central North Sea.
The cash commitment secures Culzean’s future through 2032, supports 6,000 UK jobs and creates more than 400 direct jobs.
The funding injection comes as the Oil and Gas Authority officially sanctioned the development, which is the largest field discovery in the UK North Sea for a decade.
Maersk chief executive Jakob Thomasen said: “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, Norwayand the UK – reflecting our commitment to the future of the North Sea region.”
Maersk confirmed the developmental progress was a direct result of the new high pressure, high temperature (HPHT) Cluster Area Allowance announced by the UK Government as part of this year’s budget.
The project is expected to come on stream in 2019, reaching peak production a year later, when it will produce enough gas to meet 5% of the total UK demand.
Plateau production is expected to be between 60,000 and 90,000 barrels of oil per day (bopd).
There is an estimated 300 million boe trapped in the gas condensate field.
The Chancellor of the Exchequer, Rt Hon George Osborne MP 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 £3billion ($4.5billion) 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.”
More than half of the $4.5billion committed by Maersk and its co-ventures, JX Nippon and BP, will be directed to the UK, with a total of $3.3billion in operating expenditure spent in the UK domestic market.
Andy Samuel, chief executive of the Oil & Gas Authority added: “Maersk Oil and partners’ £3billion ($4.5billion) investment to develop the Culzean discovery is excellent news for the UK during a period when the decline in global oil prices has created difficult operating conditions for this critical sector of our economy. The Oil & Gas Authority has worked closely with Maersk Oil and HM Treasury on the development plans for the Culzean field, which will support many new contracts in the oil and gas supply chain across the UK.”
The firm has an overall operating production of 550,000 boepd with assets in Denmark, Qatar, Kazakhstan, Gulf of Mexico, Algeria, Brazil and the UK.