Shetland oil field approved as crude price rises

MARK WILLIAMSON

HURRICANE Energy has won the official green light for a $500 million (£370m) plan to develop a giant oil field West of Shetland.

Surrey-based Hurricane said the UK Government has given consent for the first phase development of the Lancaster field, clearing the way for the start of a project it reckons could galvanise interest in Shetland and the North Sea.

News of the approval came on a day when Brent Crude reached a two-year high trading at $58.38 per barrel in the afternoon. Concern about the implications of the independence referendum in Kurdistan and signs of strong buying in China helped life the price.

Aim-listed Hurricane confirmed earlier this month directors had approved the investment required to complete a first phase development, which it expects to bring onstream in 2019.

The announcements will provide a boost to sentiment in the North Sea where firms have slashed spending on new projects amid the downturn that started in 2014.

Hurricane’s work could trigger a big increase in activity in the relatively under-explored granite basement area it is focused on. This lies beneath the sandstone most North Sea activity has targeted.

Chief executive Robert Trice said: “This is an important step in demonstrating the potential of basement West of Shetland and in the United Kingdom Continental Shelf more generally.”

Success in the first phase of Lancaster could help Hurricane secure the resources needed for a full development of the field, which is estimated to contain about 500 million barrels. It has three other discoveries off Shetland in its portfolio.