London (Platts)--7Jun2012/646 am EDT/1046 GMT

UK Prime Minister David Cameron and Norwegian counterpart Jens Stoltenberg inked a "landmark" agreement Thursday on strengthening energy links between the two countries, which included a commitment by Norway's Statoil to invest a further GBP12 billion ($18.6 billion) in developing heavy oil fields in the North Sea.

Also Thursday, Statoil and the UK's Centrica agreed an extension to their memorandum of understanding to collaborate on gas-focused exploration opportunities in Norway and the UK.

The intergovernmental agreement was initially set up last October between the UK and Norwegian energy ministers, hinging on the creation of a "One North Sea" policy and greater cooperation in energy and climate issues.

"We look forward to strengthening our partnership further, driving investment into a diverse, sustainable energy mix that delivers affordable long term supplies for consumers," Cameron said in a statement Thursday.

The two countries will work together on: safe and environmentally sensitive oil and gas extraction; long term gas supply; renewable energy investment; electricity interconnection; and international climate change policy development, the UK's Department of Energy and Climate Change said.

Norway already accounts for over a quarter of UK energy needs through its North Sea oil and gas exports, Cameron said, adding that he hoped the agreement would further strengthen security of supply -- the two countries dominate oil and gas production in western Europe through their North Sea activities.

UK junior energy minister Charles Hendry said: "For many decades Norway has been one of our most trusted and valuable partners, working with us to develop North Sea resources that underpin our energy security."

STATOIL HEAVY OIL INVESTMENT

Statoil last year restarted work on the Mariner and Bressay heavy oil projects in the UK sector of the North Sea and said in December last year it expected to make a final decision on the initial GBP6 billion investment in late 2012.

Statoil said in July 2011 the project was back up and running after a key change in UK tax rules.

Statoil shelved work on the fields in March after a big rise in corporation tax introduced in the UK Budget by finance minister George Osborne.

DECC said Thursday Statoil now intends to invest a further GBP12 billion over the lifetime of the Mariner-Bressay fields in addition to the GBP6 billion they have already announced.

"This will lead to the creation of up to 300 new jobs in the UK in the next few years, including at a new operations base in Aberdeen, in addition to 700 UK jobs from this investment that have already been announced," DECC said.

In addition, Norwegian global oil services firm Aker Solutions is to create 1,300 new highly skilled jobs by 2015 at its engineering hub in Chiswick, west London.

STATOIL/CENTRICA COOPERATION

Statoil and Centrica Thursday also signed an extension to their upstream agreement.

The original agreement, signed in November 2011, has already resulted in the companies bidding jointly in the 27th UK North Sea licensing round.

The latest agreement extends the accord until June 2013.

Centrica said extending the accord further cemented the strategic relationship between the UK and Norway.

Last year, Centrica signed a GBP13 billion 10-year gas supply agreement with Statoil that secured sufficient gas to meet around 5% of total UK annual demand.

Centrica said that in the past few weeks it had also completed a major acquisition from Statoil of a package of producing and development oil and gas assets in the Norwegian sector of the North Sea for GBP1 billion, increasing its reserves by 29%.

"Centrica's relationship with Statoil is vital for UK energy security as it brings together one of the world's largest gas markets with one of the world's largest gas exporters," said Centrica CEO Sam Laidlaw.

"Today's announcement deepens this relationship and we look forward to working further with Statoil to explore untapped resources across the UK and Norway," he added.

--Stuart Elliott, stuart_elliott@platts.com

--Paul Whitehead, paul_whitehead@platts.com

--Patrick McLoughlin, newsdesk@platts.com

--Edited by Maurice Geller, maurice_geller@platts.com

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