THE oil industry welcomed “encouraging” investment in the North Sea yesterday as BP announced renewed commitment to its fields.
The fuel giant is to invest £670 million in its Eastern Trough Area Project (ETAP), securing the scheme for at least 15 years.
The announcement follows a raft of job cuts in the North Sea oil and gas industry.
Companies have cited the falling price of oil as a reason for downsizing.
However, BP North Sea regional president Trevor Garlick says his firm remains “committed” to its Scottish activities.
Announcing the decision, he told reporters: “These are challenging times for the industry and we are having to make hard choices.
“Nonetheless, we remain committed to improving the competitiveness of the North Sea and to maximising economic recovery from our fields.
“BP’s primary areas of focus are the west of Shetland and central North Sea, where we are investing in both new developments such as Clair Ridge and Quad204, and in extending the life of our mature assets.”
The announcement comes one week after BP reported a sharp quarterly fall in profits to the end of June.
Drains on the company’s finances include a settlement with the US Department of Justice over the Deepwater Horizon spill in the Gulf of Mexico in 2010.
The incident cost 11 lives and caused major environmental damage.
Meanwhile, the cost per barrel of Brent crude oil has hit an average of less than half of that recorded one year ago.
However, it has recently enjoyed a small increase on the first three months of the year and yesterday Garlick insisted key North Sea operations would continue, saying: “Two weeks ago we welcomed the arrival of the Safe Caledonia flotel into the ETAP area, launching the start of a major investment programme to renew the platform and extend its field life. In parallel, we are drilling new wells on ETAP’s Machar and Marnock fields, replacing subsea infrastructure, and deploying new technologies to help maximise the fields’ recovery.
“ETAP holds significant potential and we are working to ensure its reliability, efficiency and long-term competitiveness.
“This project will secure the future of the field until 2030 and beyond.”
Earlier this week it emerged that fuel production from the UK continental shelf was up 2.5 per cent, with industry body Oil & Gas UK claiming this indicates the first rise in 15 years.
The news comes one month before the group’s annual economic report band, and yesterday the body refused to speculate on its contents.
However, chief executive Deirdre Michie said: “Oil & Gas UK is pleased to welcome BP’s announcement today of a $1 billion investment in its Eastern Trough Area Project, securing the project’s future for a further 15 years to 2030.
“According to figures from the Department for Energy, the country’s primary demand for oil and gas, critical for our transport and heating and powering our homes, is set to remain unchanged until 2030 at least.
“It is encouraging to see the continuing investment BP is making in its North Sea assets and projects to deliver a secure indigenous supply of energy for the country.”
Michie added: “Given the harsh business environment upstream oil and gas companies currently face, with the oil price more than halved since this time last year, industry as a whole is putting a great deal of effort into improving the performance of its assets – and that is something we’ll look to explore in further detail in our 2015 Economic Report next month.”
Situated 75km west of Shetland, BP’s Clair Ridge is expected to produce up to 640 million barrels over a 40 year period, amounting to around 120,000 barrels per day.
It is the first large scale offshore scheme to use reduced salinity water injection technology to extract a higher proportion of oil from the field.
Vapour recovery is also used to capture and recycle low pressure gas for use as fuel.
The Schiehallion and Loyal fields have produced almost 400 million barrels of oil since production started there in 1998.
An estimated 450 million barrels remain and the Quad204 development aims to access that, extending production to at least 2035.
The installation of new subsea pipelines and facilities has begun, with the work expected to be complete within the year.
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