UK, Norway sign energy pact, Statoil to triple UK heavy oil spend
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
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
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
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
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 and Centrica Thursday also signed an extension to their upstream
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
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, firstname.lastname@example.org
--Paul Whitehead, email@example.com
--Patrick McLoughlin, firstname.lastname@example.org
--Edited by Maurice Geller, email@example.com
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