Enquest plans £1bn North Sea spend as profits more than double

Oil firm Enquest is to invest $1 billion (£630 million) in the North Sea this year after higher prices meant full-year profit more than doubled.

The company said it would drill 11 wells and build a new hub at its Alma and Galia development, potentially creating thousands of jobs.

Enquest said it had “performed strongly” in 2011, Pretax profit grew to $390.1m, compared to a like-for-like comparison of $169.4m the year before.

Production in 2011 increased 12.5 per cent to 23,698 barrels of oil equivalent per day, with higher crude prices helping revenue to rise 52 per cent to $936m.

Chief executive Amjad Bseisu said the industry estimated that a $1bn investment “potentially creates around 9,000 jobs, directly and indirectly”.

He said measures in the recent Budget to increase tax breaks on small field development and decommissioning made the UK a more competitive proposition for oil firms.

“It will render marginal fields much more viable to develop,” he said.

He said Enquest was on track to reach production levels of 40,000 barrels a day by 2014, and would probably invest even more next year – probably between $1.5bn and $2bn.

Alma, originally named the Argyll field, was the first oil field developed in the UK and was abandoned in 1992. Enquest is using modern technology to extract most of the remaining oil, and will spend $500m this year creating a production hub at the site.

Enquest also announced it had bought an additional 18.5 per cent interest in the West Don field, increasing its interest in the prospect to 63.5 per cent.

British oil firms Faroe Petroleum and Afren also reported surging profits yesterday.

Aberdeen-based Faroe said it had swung to a full-year profit thanks to gains related to an asset swap deal with Norwegian state-owned oil firm Petoro last year.

Faroe said its proved and probable reserves rose five-fold to 23.8 million barrels of oil equivalent. It reported a pre-tax profit of £14.3m, compared with a loss of £26m in 2010.

Afren, which operates in more distant waters, said its full-year profit nearly tripled thanks to a key oil field in Nigeria.

Afren’s pre-tax profit in 2011 rose to $221m, from $79m a year earlier, as oil started flowing from its Ebok field. All eyes are now on the its assets in Iraq, where production is expected to start in August.

Afren acquired a 60 per cent interest in a Kurdish development last year.