Oil & Gas UK's Mike Tholen explains why the heavy oil at Statoil (Xetra: 676685 - news) 's Mariner field is difficult to produce but will bring great benefits in jobs, tax revenues and energy supplies.
UK oil and gas producers together invest more in Britain than any other industrial sector.
That position is strengthened by Statoil’s commitment to spend over £4bn to bring what’s known as ‘heavy’ oil in the North Sea Mariner field into production.
The field is expected to produce for thirty years and as a result, the UK is set to benefit from hundreds more high skilled, long-lasting jobs across the country, hundreds of millions of pounds of extra tax revenues and crucially, security of energy supplies.
Heavy oil isn’t easy to produce; if you held a cup of it upside down, it wouldn’t move, meaning we have to deploy leading edge technologies to heat the oil and pump it to the surface.
The new platform needed to produce oil from the Mariner field alone costs £1.2bn and it has taken 30 years since the discovery of the field for the technology and business environment to develop to allow this project to go ahead.
The project is a great example of the pioneering technology used every day in the UK oil and gas industry.
Close work between the industry and Treasury and recent changes to the tax regime to boost investment in the UK’s oil and gas reserves have also been instrumental in allowing difficult projects like these to go ahead.
And the more UK oil and gas reserves are developed, the greater the boost to jobs and the public purse.
The economic benefits of such developments for the whole of the UK and the huge remaining potential 24 bn barrels - are a stark reminder of the importance of ongoing engagement with the Government to further improve the oil and gas business environment.