Hundreds of high-paid engineering jobs are to be created in the north and north-east after a US oil giant confirmed it will develop a gas field left untapped since the 1970s.
US oil giant Chevron will go ahead with the Alder North Sea development after winning approval from the UK Government.
The high-pressure, high-temperature gas field will involve the most complex wells ever drilled in the UK and will produce first gas in 2016.
The field, around 100 miles of the Scottish coast, was initially discovered in 1975 but its difficult nature meant that proper development has only now been possible through improvements to technology.
Last night, UK Energy Minister Michael Fallon said the plan proved that there was still plenty of life in the maturing basin.
“This is one of the most complex wells to be drilled in the North Sea,” he said.
“It has required the application of extremely complex technology – the majority of which is being provided by UK companies and is a showcase of British excellence.
“Developments like Alder confirm the basin is still vibrant with many opportunities. However, the future needs companies of the calibre of Chevron with the expertise and tenacity to drive these projects forward.”
Alder could not have been developed when it was discovered in 1975, because, at that time, the UK Continental Shelf was in its infancy as an oil and gas province and the industry was developing major discoveries, such as Ninian, Forties and Brent.
A smaller accumulation such as Alder would have been uneconomic as a standalone development.
Efforts to develop Alder began in 2000 following appraisal drilling and the development of similar fields, such as Chevron’s Erskine site.
It is estimated that Chevron and project partner ConocoPhillips will reap 110million cubic feet of gas from the field over the next decade.
It will be developed via a single subsea well tied back to the existing Britannia platform 17 miles away and the gas exported to St Fergus.
“Our decision to proceed with this valuable asset was enabled by the right combination of technology, commercial conditions and knowledge sharing on high-pressure, high-temperature experience,” said Craig May, managing director of Chevron Upstream Europe.
“Field development is also being assisted by the enhanced Small Field Allowance introduced by the UK Government in 2012, which recognises the importance of developing small fields in a mature oil and gas basin.”
The project is estimated to cost around £1.5billion and Chevron has already awarded major contracts to Aker Solutions, OneSubsea and Technip.