Statoil’s £4.3bn plan for old oil discovery

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NORWAY’S Statoil has taken a 31-year-old British oil discovery off the shelf, approving a £4.3bn development that could produce more than 250 million barrels of oil over a 30-year period.

Statoil signed off the plan to develop the Mariner project, Britain’s biggest offshore hyrdocarbon development in over a decade.

It hopes to start production by 2017.

The field, south east of the Shetland Islands, will have peak production of around 55,000 barrels of oil per day between 2017 to 2020.

Lars Christian Bacher, an executive at Statoil, said: “Over its lifetime the project will generate substantial job creation and ripple effects for UK and the Aberdeen region.”

Discovered in 1981, Mariner was left dormant because its low well flow rates and other technical challenges would have made development prohibitively expensive.

But technical developments and oil prices in excess of $100 per barrel improved the project’s economics.

The field will be developed with a production, drilling and quarters platform, based on a steel jacket, with 50 active well slots, and a floating storage unit.

The contract for a drilling rig – like the one pictured – will be awarded next spring.

Mariner is the second decades-old project Statoil has revived in two days.

On Thursday, the company approved spending £3.3bn on its Dagny field in Norway, which was first discovered in 1974.

Mariner, consisting of two shallow reservoirs, is expected to create more than 700 long-term full-time jobs, Statoil said.

Statoil holds 65.11 per cent of the project, JX Nippon Exploration and Production has 28.89 per cent and Alba Resources, a unit of Cairn Energy, 6 per cent.