Business secretary John Hutton outlined plans for increased North Sea oil production today, as he gave the green light for two new field developments, changes to the North Sea licensing system and announced record interest in the latest licensing rounds.
The two new field developments – West Don and Don South West – due to start production in the first half of next year – are estimated at peak to produce up to 50,000 barrels of oil a day, with total production of over 50 million barrels.
Hutton also outlined his plans for new oil and gas fields to be carved out of unprofitable parts of some existing fields. The change will mean production from these new fields would be unaffected by Petroleum Revenue Tax.
The changes will affect around 30 fields, and initial indications are that it could see additional peak daily production of 20,000 barrels of oil.
‘High global oil prices are in part a signal that producing countries need to increase supply. All oil producing countries need to take action, and it’s therefore important for us to make sure we sustain the right environment to maximise recovery of the UK’s own reserves. The North Sea industry is of central importance to the British economy: it supports some 380,000 jobs, with investment worth around £5bn a year,’ said Hutton.