Norwegian oil giant to make $7bn splash in North Sea

The Scandinavian oil giant Statoil has announced plans to invest £4.3bn in an old North Sea oilfield, creating 700 new jobs in the UK oil industry.

by Michael Northcott
Last Updated: 19 Aug 2013

It’s a patch of the North Sea that has been drilled for around 31 years already, but Statoil reckons there are another 30 years of life left in it with production topping 55,000 barrels per day.

The oilfield is about 95 miles southeast of the Shetland islands, meaning that at least 200 of the new jobs will be onshore in Aberdeen. The firm said it wants to recruit most of the new staff in early 2013 to get the ball rolling.

There are still some hurdles, like getting final approval from the UK’s authorities, but it is thought Statoil’s new facility will be producing oil by around 2017. 

The site, which was discovered back in 1981 had been left out of use because the flow rates from wells and a few other technicalities meant it was written off as too pricey for the producers to bother with it. But oil-drilling technology has moved on a bit since 1981, and now that oil prices have topped $100 per barrel, it suddenly looks a bit more attractive. 

There has of course been a lot of talk about 'peak oil', the point at which global oil production is its highest ever and it can only go down hill from there. But in this instance, an oilfield has become viable again because of technology and prices, making it harder and harder to predict when peak oil will be.

Statoil’s executive vice president for development and production international (helluva job title, eh?), Lars Christian Bacher, said: ‘The Mariner project is a good strategic fit for Statoil. The North Sea is a core area [for the firm] and we look forward to taking a leading role in further developing also the UK part of this basin.’

The firm is notable for having achieved increasing penetration of the UK energy market in recent years. Those eerie, mystical looking ads showing large pipelines underwater and giant plug sockets in the sea are not only abstract, but have not entirely subtle overtones of Soviet era public sector omnipotence. Statoil is 67% government-owned, after all.

Still, a few extra jobs can’t be a bad thing for the UK’s oil industry. And given that the oil is just off British shores, let’s hope it brings the price of a litre of petrol down by a penny or two…

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