North Sea project provides boost for ailing UK economy

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Scottish North Sea project provides boost to stagnant UK economy

Scottish newsNorth Sea project provides boost for ailing UK economy

by Aya Kawanishi

A new billion-pound project in the North Sea will create thousands of jobs and provide a much needed boost to the nosediving UK economy after multiple energy firms signed initial contracts yesterday to kickstart a development in the sixth largest gas field in the Southern North Sea territory.

The Cygnus project, valued at £1.4bn, will be led by French multi-national utility company GDF Suez, Bayerngas, and Scottish Gas-owner Centrica. With 80 percent of the work awarded to the UK-based firms, it is expected to deliver 4,000 direct and indirect jobs over the next four years during the construction phase.

Amongst the companies to benefit from the initial contracts are Fife-based Burntisland Fabricators, which will manage the main fabrication contracts, with the creation of 100 new jobs.

A further 50 jobs will be created at GDF Suez’s operational headquarters in Aberdeen, with an additional 100 jobs to come when offshore platform operations are manned from 2015 when production is expected to commence.

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The companies said that Westminster’s announcement last month to allow tax relief for new large shallow water gas fields gave “the certainty and confidence to proceed with the development”.

Scotland plays a major role in the UK’s oil and gas industry, supporting 440,000 jobs across the UK with 45 percent of them in Scotland, according to official analysis by Oil and Gas UK in 2010.

This means that more than six percent of the working population are employed in Scotland’s energy sector, according to Scottish Development International - a joint venture between the Scottish government, Scottish Enterprise and Highlands and Islands Enterprise - which supports companies investing in Scotland.

Welcoming the announcement, Scottish government Finance Secretary, John Swinney, said: “Scotland has an incredible wealth of energy resources, capable of both meeting our energy needs and generating significant exports to the rest of the UK and Europe, and the Scottish Government’s Oil and Gas Strategy, developed in conjunction with industry, lays out a plan to help the industry go from strength to strength.”

Sam Laidlaw, the Scottish gas owner Centrica chief, said: “Today’s announcement represents a significant boost to the UK’s long term energy security and creates much needed jobs.

“For Centrica, which handles around a third of the UK’s gas and supplies half of its homes, this is an extremely important project as we look to unlock remaining gas in the North Sea and secure UK gas for our customers.”

Both GDF SUEZ and Bayerngas said that Cygnus is a major project for the UK gas industry.

In a statement, UK Secretary of State for Energy and Climate Change Edward Davey said: “The North Sea remains a vital source of the nation’s energy security and our expertise is renowned the world over. The Government is determined to maintain the best possible investment environment to ensure we capitalise fully on this national asset.

“There continues to be significant interest in the annual licensing rounds, with interest in established and the new frontier West of Shetland.  The go-ahead for the Cygnus field is terrific news, and will contribute substantially to the UK’s gas needs and support thousands of high skilled jobs,” he added.

The Cygnus field is the largest discovery in the Southern Gas Basin in the last 25 years and is expected to meet demand for nearly one and a half million homes at peak production, accounting for around 5 percent of the UK’s gas production.

The new project will demonstrate further that the prospect of Scottish independence is having little or no effect on North Sea investment.

Production is expected to start in late 2015.

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commented 2012-08-08 20:20:08 +0100 · Flag
In the run up to Independence, and until final settlement. They will do what they have always done, try and bleed us dry, only faster than before!
published this page in News 2012-08-07 17:03:11 +0100