20 March 2014, News Wires – Newly announced UK tax breaks for high-pressure and high-temperature projects in the North Sea are set to boost investment and bolster prospects for Maersk Oil’s Culzean scheme being sanctioned, the company was reported as saying.
The Danish operator is looking to bring the planned UK development on stream in 2019 and recently issued a tender for a high-specification heavy-duty jack-up to carry out drilling at the gas condensate field in the central North Sea.
Chief executive Jakob Thomasen said the new allowance for HPHT fields, unveiled by British Chancellor George Osborne in his Budget this week, “is a welcome development that can enhance the development prospects of the Culzean project and other HPHT projects in the North Sea”, Reuters reported.
Maersk has yet to sanction the field investment, which would entail spending of more than £3 billion ($5 billion) with “billions more” set to be spent over the operating life of the asset, according to Thomasen.
Culzean is one of the largest UK discoveries in recent years and could meet around 5% of the UK’s energy needs in 2020.
Maersk Oil has a 49.99% operating interest in Culzean with partners JX Nippon UK on 17.06%, Eni on 16.95% and BP on 16%.
The British government has already provided significant tax incentives for oil and gas projects that have unlocked billions of pounds of investment – around £7 billion in 2013 alone.
Osborne said: “The allowance is expected to support the development of big HPHT projects that would create and sustain thousands of jobs, provide a significant portion of UK gas demand, and generate billions of pounds of capital investment.”