LONDON: Danish energy group Maersk is to lead a £3bn project to develop the largest gasfield discovered in the UK North Sea for a decade, the first big investment to benefit from tax breaks announced in the Budget.
The Culzean field in the central region of the North Sea is expected to produce enough gas to meet 5 per cent of UK demand when it reaches peak output in 2020-21, the company said on Monday. It is the largest gasfield to get the go-ahead for development since East Brae in 1990.
Maersk, JX Nippon and BP discovered the gas condensate field, which holds an estimated 250m-300m barrels of oil equivalent in resources, in 2008. Production is due to start in 2019 and continue for at least 13 years, peaking at 60,000-90,000 boe per day.
“Culzean is an important development for the UK and also for Maersk Oil and our co-venturers,” said Jakob Thomasen, chief executive of Maersk Oil.
The news is a rare boost for the UK 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.
In an effort to breathe new life into the region, George Osborne, chancellor, announced a sharp cut in taxes worth £1.3bn in March, a rescue package that included a cut in the headline supplementary rate of profits and a simplified investment allowance enabling companies to claim back the costs of new spending.
Mr Osborne said the announcement was “a clear signal that the North Sea is open for business”.
Culzean is expected to support an estimated 6,000 jobs and create more than 400 jobs directly, according to Maersk.
