£4 billion North Sea field project has been given approval to go ahead
Posted on: 12/12/2013

The Kraken oilfield situated east of the Shetland Islands is to be developed by Aberdeen based exploration and production company EnQuest; providing 20,000 jobs as well as generating billions in taxpayer revenues. The Department of Energy and Climate Change has approved the plans, described as the largest UK North Sea investment to be revealed this year. Incorporating two separate oil fields, the yield from each one will be able to make the most of Government oil grants which will then allow tax relief on profits of up to £800 million to be claimed by companies. The chief executive of EnQuest, Amjad Bseisu, has said that they are delighted to have been given the go-ahead for the Kraken project which is a transformational undertaking for EnQuest. During the 25 year life span of the field, they will be working with their partners and the Government to maximise the extraction of about 140 million barrels of oil. He added that it is only by combining their skills and expertise with fiscal incentives such as considerable oil allowances, that substantial projects like Kraken are possible.

During construction the 20,000 jobs that will make up the workforce average about 1,000 UK jobs for Kraken’s each year of life. It is expected that production will commence in 2017 with an anticipated gross peak oil output of more than 50,000 barrels per day. According to Chancellor George Osborne, this large investment will create jobs and give a boost to the British economy. It also shows that attempts to establish a competitive tax system to extract the most oil and gas from the North Sea are proving effective. The minister for energy and enterprise in Scotland, Fergus Ewing, has said that this announcement plus other recent investments are “unequivocal evidence” of the faith that the oil and gas industry has in the future of the North Sea. He added that this also confirms that new opportunities are still available in the sector. With a potential wholesale value of £1.5 trillion, up to 24 billion barrels, more than half of the North Sea resources by value, still to be extracted, it is obvious that the industry will make an important contribution to the Scottish economy in future decades. Lang Banks, WWF Scotland director, said that with reference to environmental concerns, generous tax breaks that encourage companies to exploit oil that was once deemed commercially unviable, like the Kraken oil field, need to end. Scotland should be putting in place plans to move away from dirty fossil fuels. Changes need to be implemented that will allow the engineering skills presently utilised in the oil and gas industry, to be applied in supporting the production of a range of cleaner forms of energy.

 

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