£944 million for new North Sea projects

18 Dec 2000

Scotland Office Minister Brian Wilson said that investment of almost £944 million in four major North Sea projects will boost employment opportunities in the oil and gas sector by creating or protecting around 1,250 jobs in Scotland.

Commenting on the investment - £320 million for the Magnus gas pipeline; £340 million for Leadon oilfield development; £210 million for Foinaven and £74 million for Kyle - Mr Wilson said:

"I am particularly pleased to see major consolidation of activity West of Shetland, such as the Magnus enhanced oil recovery project. This is the kind of pioneering project which proves that there is still a big future for the offshore oil industry.

"Oil and gas make a huge contribution to this country, supporting over 100,000 jobs in Scotland and 300,000 in the UK as a whole, with about ten per cent of these based off-shore. These new projects will generate around 2500 jobs across the UK, around half of which will be in Scotland, including 220 on pipe finishing at Bredero Price Coasters in Leith.

"The Magnus project has involved more than 20 partners and demanded a unique level of collaboration to see the project through. This is the high level co-operation between licensees which PILOT, the successor to the Oil & Gas Industry Taskforce, has identified as a crucial element in the future development of the UK’s offshore gas and oilfields.

"Today's announcement is concrete proof of the Government's ongoing commitment to the development of the offshore oil and gas sectors. This major package of investment in new projects will help to secure the future of these industries for a number of years to come."

NOTES FOR NEWS EDITORS

  1. Brian Wilson is a member of PILOT, the successor to the Oil & Gas Industry Taskforce.
  2. The Magnus gas pipeline, the first from the deep West of Shetland oilfields, is a unique project to take surplus gas to the North Sea’s most northerly oil platform on the Magnus oilfield. There the gas will be injected into the oil reservoir 8900 feet under the seabed to flush out an extra 50 million barrels of oil. The gas - equal to another 50 million barrels of oil - will be recovered and landed via another pipe network for use onshore, providing first access to West of Shetland gas which currently has to be re-injected locally.
  3. Located in block 9/14 approximately 220 miles north east of Aberdeen, Leadon oilfield was discovered in 1979 by BNOC (British National Oil Corporation) but was thought uneconomic until an appraisal well drilled in 1999 proved a northern extension to be oil bearing. Leadon oilfield is the largest project to be given the go ahead this year. It is licensed to and operated by Kerr-McGee North Sea (U.K.) Ltd, and has recoverable reserves of 95 million barrels of oil which will be produced with pressure support from water injection with all wells linked to a new Floating Production Storage and Offloading vessel (FPSO).
  4. The Foinaven Phase 2 Project (comprising the East Foinaven satellite development and infill-drilling in the Foinaven main-field) represents an investment of £210 million and provides an additional 85 million barrels of incremental oil. The project spend is mainly in well engineering and drilling of new subsea wells which will extend the plateau oil production from the Petrojarl Foinavenproduction vessel and will sustain 550 jobs. Co-Venturers in Foinaven are BP (operator) 72% and Marathon 28%. The East Foinaven Partners are BP (Operator) 43%, Marathon 47% and Petrobras 10%.
  5. The Kyle field is located in the central North Sea, about 200km east south-eats of Aberdeen. Kyle was discovered in 1993. The production of Kyle will allow the incremental recovery of some 3 million barrels from the Curlew field.
  6. All projects have been given full environmental assessment to provide detailed account of impacts associated with the development, followed by public consultation. No significant impacts have been identified and the projects are unlikely to affect possible future offshore conservation areas that may be identified. The DTI also assessed Magnus’s implications for the Sullom Voe candidate Special Area of Conservation and concluded that it will not adversely affect the site.