A.P. Møller-Maersk A/S said it has received approval to develop the $4.5 billion Culzean gas field, the largest new find in the U.K. North Sea for a decade, with the capacity to deliver around 5% of Britain’s demand come 2021.
Maersk Oil, the wholly owned oil and gas unit of the Danish shipping conglomerate, said the field would start producing in 2019 and keep going for at least 13 years, with a production plateau of around 60,000 barrels a day to 90,000 barrels of oil equivalent a day. The field contains between 250 million and 300 million barrels of oil equivalent, the company said.
Maersk Oil said Culzean, discovered in 2008, benefits from a U.K. government support scheme for high-pressure, high-temperature fields, which typically are more expensive to develop than lower-pressure fields because of the technology that has to be deployed.
“We are pleased the field will support U.K. economic growth as well as extend understanding of high-pressure, high-temperature development,” said Maersk Oil Chief Executive Jakob Thomasen.
The British government said the decision demonstrated its commitment to attract new investment to the country’s North Sea oil sector despite difficult economic conditions.
“Despite challenging times, this government has backed the oil and gas industry at every turn,” said U.K. Treasury chief George Osborne.
The go ahead for the development Culzean field comes at a difficult time for Maersk Oil and much of the oil and gas industry as crude prices have dipped below $40 a barrel, down from more than $100 in the middle of last year. In May this year, A.P. Møller-Maersk CEO Nils Andersen told The Wall Street Journal that Maersk Oil needed an oil price of at least $70 a barrel to stay profitable.
Maersk Oil is operator of the Culzean field with a 49.99% stake. JX Nippon owns 34.01% and BP PLC. subsidiary Britoil has a 16% stake.
By Kjetil Malkenes Hovland
Source: Wall Street Journal
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