BP and a number of other oil companies are to invest £3 billion in redeveloping two oil fields off the Shetland Islands.
The company believes 450 million barrels of oil could be extracted from the Schiehallion and Loyal oil fields which lie to the west of Shetland in the north Atlantic Ocean. The fields have produced nearly 400 million barrels since 1998.
BP is undertaking the work with other oil companies. BP will have a 36.3 per cent stake in the venture, as will Royal Dutch Shell, Hess Ltd will hold 12.9 per cent, and Statoil (UK) and Murphy Petroleum 4.84 per cent each.
Trevor Garlick, the regional president of BP’s North Sea business, said: “The Schiehallion and Loyal oil fields are established assets with a strong future, and we and our co-venturers are taking some significant steps to maximise the greater potential we now see in these fields.”
The project, Quad 204, will involve a new vessel for the Schiehallion site, designed to process and export 130,000 barrels of oil a day.
The “floating, production, storage and offloading” vessel, due to be installed in 2015, will be 270m long by 52m wide and can store at least one million barrels.
BP said it plans to upgrade and replace under-sea facilities, which would “enable the full development of the reserves”. Oil production is due to start in 2016.
Bob Dudley, group chief executive of BP, said: “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 has over 40 years’ experience in the North Sea, during which time it has developed a strong set of assets. We are committed to growing and maintaining a material, high-quality business there for the long term.
“For us, a key to this strategy is the need to maintain the integrity of our existing infrastructure, to look after our reservoirs and maximise recovery, and to deploy and develop the necessary capability.”