UK-based oil production company EnQuest has received a brownfield tax allowance from the British Government to extend its Thistle oil field development in the North Sea.

The company is one of the first oil and gas operators to receive a brownfield tax allowance which forms part of a series of the UK Government’s measures to boost investment in the North Sea.

The extension of the Thistle oil field development programme is expected to not only preserve nearly 500 existing North Sea jobs, but also create about 1,000 new jobs across the UK oil and gas supply chain in Aberdeen, Newcastle, Manchester and Swansea, during the next three years.

Economic Secretary to the Treasury, Sajid Javid MP, welcomed the government’s tax allowance announcement.

"This is positive news and demonstrates how the government’s package of changes to the oil and gas tax regime, including the introduction of brownfield allowances, is stimulating billions of pounds of investment, supporting jobs, delivering revenue for taxpayers and helping ensure we make the most of this valuable national asset," Javid added.

Around £169m will be further invested in the project as part of the life extension programme, with work contracts to be awarded to around 30 companies across the UK supply chain.

EnQuest said the revived Thistle field has increased production threefold, a level that has not been seen since the nineties.

"Around £169m will be further invested in the project as part of the life extension programme."

A technology programme is being conducted to simplify and streamline processes to create a reliable production environment, including a power upgrade to install a 30MW power generation turbine, a new process control safety system and a wide-ranging topsides integrity work.

EnQuest Aberdeen general manager David Heslop said: "Before EnQuest acquired Thistle in 2010, production was declining and, coupled with ageing infrastructure, it was approaching the point where production may have stopped."

"As a result of our investment so far, which has included facilities and safety systems upgrades, a major rig reactivation programme and drilling of five new wells, production has significantly increased.

"With the assistance of the brownfield tax allowance, we are now able to embark on the next phase of Thistle’s late life extension programme, realising reserves of 35 MMboe and extending field life," Heslop added.

EnQuest chief executive officer Amjad Bseisu said: "This sent out positive signals about the UK oil industry’s fiscal regime and was particularly positive for EnQuest in terms of executing our long-term strategy of delivering sustainable growth in North Sea oil production."

The government’s announcement that it is to provide nearly £1bn of tax breaks to oil companies on tax relief also attracted criticism from environmental organisations, such as Friends of the Earth (FoE).

Image: Thistle platform helideck.