The UK Oil & Gas Authority has approved the development plan for the Culzean Field, located in the North Sea, operator Maersk Oil said in a news release. Discovered in 2008, the company said potential reserves could satisfy about 5 percent of British gas demand by the next decade. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
Maersk Oil, along with its partners JX Nippon and BP (Britoil), will be investing about £3bn in developing Culzean, with at least half of that committed to investment in the UK. Over the projected life of the field, it’s anticipated that £2.1bn (USD 3.3 bn) in operating expenditure will be spent in the UK domestic market.
Further, the project is expected to support an estimated 6,000 UK jobs and create a further 400 directly, as the Culzean field aligns to fit with the UK’s commitment of increasing power generation through gas fired poster stations. The allowance was brought in by the current UK government in the 2015 budget.
“This investment by Maersk Oil and its co-venturers, in this technically demanding HPHT field, is very encouraging at this challenging time for the industry and reinforces the fact that that the UK Continental Shelf continues to have much to offer”, Deirdre Michie, chief executive of Oil & Gas UK, the nation’s offshore oil and gas industry association, said.
Chief executive of Maersk Oil, Jakob Thomasen, said: “Culzean is an important development for the UK and also for Maersk Oil and our co-venturers”.
“Today’s announcement sends a clear signal that the North Sea is open for business”, Chancellor of the Exchequer George Osborne said in a statement.
The news is a rare boost for the United Kingdom North Sea, a high-cost region that is in long-term production decline and has been hit hard by the collapse in oil prices since last summer from more than $115 a barrel to just $50.