THE crisis-hit North Sea oil and gas sector was thrown a lifeline yesterday as “milestone” plans for a major extraction were announced.

Almost 400 million barrels of oil have been produced from the Schiehallion and adjacent Loyal fields west of Shetland in the past 20 years.

Yesterday it emerged that another 450 million barrels remain, which BP says will sustain the fields “to 2035 and beyond”.

The claim follows the Quad 204 redevelopment project by BP, Shell and Siccar Point Energy, which has poured billions of pounds into upgrading and replacing subsea facilities and creating the world’s biggest floating production, storage and offloading vessel.

The first oil from the redeveloped Schiehallion has been retrieved and BP now expects to return to growth in the North Sea.

Production will ramp up to about 130,000 barrels per day this year, increasing again to 200,000 a day by 2020.

The news follows major turmoil in the sector, which contracted after oil prices bottomed out and stayed low.

According to umbrella body Oil & Gas UK, the offshore industry supported 453,000 jobs at its peak in 2014, but 84,000 of these were lost in 2015 alone, with tens of thousands more gone last year.

These include posts directly and indirectly connected to the sector, such as at engineering firms, hotels and transport firms.

Deidre Michie of Oil & Gas UK said the news showed that “faith in the long-term health of the basin is well founded”, while Scottish Energy Minister Paul Wheelhouse said it proved the oil and gas sector “has a bright future for decades to come”.

Bob Dudley, BP group chief executive, said: “The start of production from Quad 204 – one of the largest recent investments in the UK – is an important milestone for BP, marking a return to growth for our North Sea business.

Dudley said the company anticipated “growing production and cash flows” from a number of “higher- margin major projects”.

Production from the new Clair Ridge project is expected next year and the firm will participate in up to five UK exploration wells in the next 18 months, with another 50 development wells planned within four years.

Wheelhouse said: “This is the second positive announcement for the west of Shetland region in recent months, with Hurricane Energy stating in March that one billion barrels of oil could be contained within the Greater Lancaster field.

“With up to 20 billion barrels of oil equivalent remaining in the North Sea, Scotland’s oil and gas industry has a bright future for decades to come.”