Jun 25, 2018
Shell greenlights second North Sea project this year
Energy major Royal Dutch Shell has signed off an investment into the Fram field, giving a green light to its second UK North Sea oil and gas project this year amid a revival of fortunes in the ageing basin. Despite selling more than half its UK production base to Chrysaor, a small UK company backed by US private equity funds, in 2017, Shell is recommitting to the North Sea as cost cutting and efficiencies make investments more economical. The approval follows the January decision to redevelop the Penguins field north-east of the Shetland Islands, which was the first major project Shell has announced in the North Sea since 2012, before a brutal oil downturn got under way. Steve Phimister, vice-president for Shell's upstream division in the UK and Ireland, told the FT that Shell has been able to cut development costs and connect existing infrastructure from bigger projects to smaller North Sea developments to make them more economically viable. Oil & Gas UK, which represents North Sea operators, said earlier this year up to 16 projects could get the go-ahead during the next 12 months, unlocking investment of about £5bn. UK North Sea oil production has fallen steadily since the 1990s but has seen a recovery of late as new projects came online and as companies became more efficient.
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