BP pushes button on North Sea project asplan unveiled

BP and its partners will invest more than $500 million (£331m) in a two-year appraisal programme that will lead to the initial drilling of five wells.

Work has already begun at the first, and depending upon results from the original five, the total number of test wells could rise to as many as a dozen.

The aim is to determine overall volumes at the site in Clair’s south-western sector, as well as the quality of oil reserves and the difficulties in extraction..

Trevor Garlick, regional president for BP North Sea, said the decision to go ahead with the appraisal programme was a “major milestone”.

He added: “If successful, the appraisal programme could pave the way for a third phase of development at Clair – this is now a real possibility.”

The announcement came as UK ministers prepared to unveil their widely-anticipated strategy for the future of the oil and gas sector today in Aberdeen.

The plan is aimed at securing billions of pounds of investment while protecting thousands of North Sea jobs. Three secretaries of state will be in Aberdeen to describe plans for “tax certainty”, supply chain support and skills development.

Business Secretary Vince Cable, Scottish Secretary Michael Moore and Energy Secretary Ed Davey will speak to business leaders about the strategy.

The Clair development was discovered in 1977, but drilling into the area’s complex reservoirs was delayed by two decades until new technologies made it financially viable.

Phase one came on-stream in February 2005, and has so far produced about 90 million barrels. That oil is piped to the Sullom Voe terminal in Shetland for onward distribution.

Work is underway on the huge $7 billion second-phase development of Clair Ridge, which is expected to produce 640 million barrels of oil over a 40-year lifetime. Production is scheduled to begin in 2016.