Shares in Premier Oil edged ahead yesterday after the producer was given the green light for a new £1.5 billion North Sea oil field.
The UK Department of Climate Change’s approval for the Catcher development, which is located around 125 miles east of Aberdeen, came as oil and gas executives gathered in the north east for the second day of a major industry conference.
The Catcher field is among the most significant new plays being developed on the UK Continental Shelf and at peak output it is expected to account for more than one-in-20 barrels of oil produced from the North Sea.
In total, Catcher is expected to yield approximately 96 million barrels of oil, with a peak production rate of around 50,000 barrels per day.
The approved development plan will see a total of 22 subsea wells drilled on the Catcher, Varadero and Burgman fields, with production pipelines tied back to a leased floating production and storage vessel.
Oil from the field, which is expected to have a production life of more than 10 years, will be offloaded by tankers while gas will be exported through the Segal facilities.
“Having discovered Catcher in 2010, we are extremely pleased to have brought the Catcher area through the development approval process,” Premier chief executive officer Simon Lockett said.
“Once on-stream this project, which has been facilitated by the Government’s small field allowances, will underpin our growing cash flows.”
Premier has a 50% stake in Catcher and is the field’s operator.
Two venture partners Edinburgh-based Cairn Energy and Hungarian prospector MOL Group hold 30% and 20% stakes respectively.
All major service contracts have been awarded and the project is now in the execution phase, with a target of first oil by mid-2017.
Energy Minister Michael Fallon said the approval of Catcher represented a major boost to the oil and gas sector in the UK and the associated supply chain.
“The Catcher area development shows that there continues to be an extraordinary level of interest in North Sea oil and gas, which is excellent news for industry and for the whole of the UK,” Mr Fallon said.
“The project represents over £1bn of investment, and almost all of the subsea expertise and equipment needed for this development is being supplied by British companies right across the country,” he added.
Energy Minister Fergus Ewing said: “I warmly welcome this £1.5 billion investment in the Catcher Area Development, and the jobs and supply chain opportunities it will bring.”
Shares in Premier closed up 5.50p at 341.10p while Cairn Energy’s stock was up 1.40p at 201.50p.