The UK’s Oil and Gas Authority has approved the development of the largest gas field discovered in the UK North Sea in the last ten years.
Improving UK supply
The field was discovered by Danish developer Maersk in 2008. The approval will allow Maersk to invest £3bn in the Culzean project, along with BP and JX Nippon. The field could supply 5% of UK consumption.
The Culzean field is the largest to be approved since East Bray in 1990 and is expected to hold up to the equivalent of 300m barrels of oil. The company expects production to continue for 13 years once it starts in 2019, with output peaking in 2020/21 before levelling at 60,000 to 90,000 barrels a day.
Tax cut advantage
The project is thought to be the first major investment to take advantage of the tax incentives announced in the 2015 budget. In March, the Chancellor cut tax rates on production and introduced a generous investment allowance to spur the industry, where thousands of jobs are being lost.
The announcement comes as a major boost for the North Sea oil industry, where production and investment has suffered amid tumbling oil prices.
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