Scottish oil company Dana Petroleum is to develop two offshore oil fields near the UK’s Western Isles, after the Department for Energy and Climate Change approved the development today.
The £1bn ($1.6bn) contract comprises of nine wells in the already discovered Harris and Barra fields located in the northern North Sea, 160km east of the Shetlands and 12km west of the Tern field.
It is believed the wells contain around 45 million barrels of recoverable oil.
The go ahead for the project follows tax measures announced by HM Treasury during 2012 to help support and increase investment in the North Sea.
Dana’s group chief executive, Dr Marcus Richards, said: "The Western Isles project is at the heart of our growth strategy. Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016.
"We welcome the announcements by the Treasury this year to support oil and gas companies operating in the North Sea. This will help create a brighter future for the industry."
The Harris and Barra development involves a subsea development of at least five production and four water injection wells, plus two exploration wells tied back to a newly built floating production, storage and offloading vessel (FPSO) with oil export using shuttle tankers.
Drilling is expected to begin in 2013, with subsea installation taking place in the summer of 2014 and FPSO installation taking place in the summer of 2015. Plateau production is expected to be around 40,000 boepd, adding more than 26,000 boepd to Dana’s UK production rates.
Daily production is expected to start in 2015 with an estimated lifespan of 15 years.
John Hayes, UK Minister of State for Energy and Climate Change, said: "I am delighted to announce the go-ahead for this project which will bring new jobs and create new opportunities for UK companies to compete for key parts of the work.
"Dana Petroleum has really demonstrated its commitment to the North Sea and in doing so is playing its part in helping to secure the UK’s future energy needs."
The Department of Energy and Climate Change also approved Dana as operator of the Western Isles development project, which is a joint venture between Dana with an equity share of 77% and Japanese upstream exploration and production company Cieco, which holds the remaining 23% interest.
Image: Dana’s group chief executive, Dr Marcus Richards, said: "Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016." Photo courtesy of Dana Petroleum.
