17 December 2012

Dana Petroleum gets approval to develop $1.6bn Western Isles project in the North Sea

- Dept. of Energy and Climate Change approves Western Isles project 
- Develop two discovered oil fields Harris & Barra in Northern North Sea
- JV between Dana (77%) and Japanese E&P company Cieco (23%)

17 December 2012 - A $1.6 billion project to develop two oil fields in the North Sea, led by Aberdeen-based Dana Petroleum, was given the go-ahead today. The Department of Energy and Climate Change has approved the Western Isles project which will develop two discovered oil fields called Harris and Barra in the Northern North Sea, 160km east of the Shetlands and 12km west of the Tern field. 

The nine-well Western Isles development is expected to produce more than 40,000 barrels of oil equivalent, adding more than 30,000 barrels (net) to Dana’s daily production when it comes onstream in 2015. 

The green light for this project follows tax measures announced by HM Treasury during 2012 that are helping to support and increase investment in the North Sea. 

Dr Marcus Richards, Dana’s Group Chief Executive, said: “The Western Isles project is at the heart of our growth strategy. Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016. 

We welcome the announcements by the Treasury this year to support oil and gas companies operating in the North Sea. This will help create a brighter future for the industry.” 

The Economic Secretary to the Treasury, Sajid Javid said: “The North Sea is a vital national asset, with oil and gas production supporting a third of a million jobs. That is why this Government has announced a range of tax measures expected to generate billions of new investment and create jobs. Dana’s announcement today is a further endorsement of that strategy.” 

John Hayes, UK Minister of State for Energy and Climate Change said:”I am delighted to announce the go-ahead for this project which will bring new jobs and create new opportunities for UK companies to compete for key parts of the work. Dana Petroleum has really demonstrated its commitment to the North Sea and in doing so is playing its part in helping to secure the UK’s future energy needs.” 

The Harris and Barra fields are estimated to contain recoverable oil reserves of over 45million barrels. 

The Department of Energy and Climate Change also approved Dana as operator of the Western Isles development project which is a joint venture between Dana with an equity share of 77%, and Japanese upstream exploration and production company Cieco, which holds the remaining 23%. 

Dana Petroleum plc is a $4 billion oil and gas business with operations in the UK, Egypt, Norway, The Netherlands and Africa, producing 60,000 barrels of oil a day. 

Its portfolio in the UK consists of exploration, production and development activities throughout the Northern, Central and Southern North Sea, West of Shetland, and in the Moray Firth. It holds a total of 20 operated and 35 non-operated licences acquired through successful licensing rounds, acquisitions and asset farm-ins. Its average annual production in 2011 was 33,000 barrels of oil per day. In 2012 it plans to drill five exploration wells and participate in the UK 27th Licensing Round. 

Source: Dana Petroleum