BP, Shell to Invest $4.8 Billion in U.K. Atlantic Oilfields
BP Plc (BP/), Royal Dutch Shell Plc (RDSA) and Statoil ASA (STL) will redevelop oilfields west of the U.K.’s Shetland Islands, extending production out to 2035 after the government raised tax allowances on investment.
The companies will invest about 3 billion pounds ($4.8 billion) in the Schiehallion and Loyal fields. They plan to replace the floating production, storage and offloading vessel at Schiehallion, London-based BP said today in a statement. The new vessel that will be installed in 2015 will be able to process and export as many as 130,000 barrels of oil a day.
U.K. Chancellor of the Exchequer George Osborne this month raised tax breaks on oil investment after criticism from the industry that the higher tax on profits introduced in March would cost British jobs. Statoil this month reversed a decision to freeze a $10 billion investment in the North Sea’s Mariner and Bressay fields, while BP has said it will seek higher-growth projects in Britain as it sells mature assets in the southern North Sea.
“This decision is another example of BP’s strategy to deliver long-term value growth through investing in the large fields and in key basins where it has extensive knowledge,” BP Chief Executive Officer Robert Dudley said in a statement. “We are committed to growing and maintaining a material, high quality business there for the long term.”
The Schiehallion and Loyal fields, in the U.K. Atlantic Ocean north of Scotland, have produced about 400 million barrels of oil since 1998 and still hold about 450 million barrels of resources. BP’s other partners in the project are Hess Corp., OMV AG (OMV) and Murphy Oil Corp. (MUR)
“This major investment is very good news for the U.K.,” said Justine Greening, economic secretary to the Treasury. “Together with recent decisions by other companies, it shows the North Sea basin remains an attractive area for significant levels of new investment.”
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net Brian Swint in London at bswint@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
Rate These Stories
Rate this Page