Oil production in North Sea set to drop but Falkland wins investment

NORTH Sea oil output looks set to slump next month as major fields in British and Norwegian waters close for maintenance.

Supply from the UK’s Forties area, the largest production stream in the North Sea, is set to fall in September because Nexen plans to close its Buzzard field for maintenance.

Falling oil and gas output has already contributed to the recent contraction in UK gross domestic product (GDP) and a further decline in September will make the hoped-for recovery in the third quarter harder to achieve.

The expected reduction in supply has already pushed the price of Brent crude higher, especially as an export schedule yesterday revealed that Norway’s Statoil has also scheduled work in September at some of its offshore fields. Norway’s Troll crude oil stream will be operating at less than half its usual level during the month.

But activity in the waters around the Falkland Islands is set to increase after one of the region’s main explorers signed an investment deal worth up to $230 million (£147m) with American firm Noble Energy.

Noble agreed to take a 35 per cent stake in the company’s exploration fields in the South Atlantic. Tim Bushell, chief executive of Falkland Oil & Gas, said: “We are delighted Noble is joining us in our exciting exploration programme. Noble brings strong technical expertise and an excellent track record of exploration and development success.”

Noble will make a $25m cash payment and will meet 60 per cent of the cost of a planned well.