OSLO Britain has approved the development plan for Statoil's $7 billion project at the Mariner heavy-oil field in the North Sea, the largest new offshore project off Britain in over a decade, the Energy Secretary said on Friday.
Two years ago, Statoil suspended the field's development plans when the British government proposed a tax rise on the North Sea oil and gas sector. After talks with Statoil and other oil companies, Chancellor George Osborne withdrew the proposal.
"Mariner will be one of the biggest projects ever in the North Sea and the 4.6 billion pound commitment over 40 years from Statoil is a vote of confidence in the future of UK oil and gas," Britain's Energy Secretary Edward Davey said in a statement.
The Mariner field, which contains over 250 million barrels, is expected to produce around 55,000 barrels of oil per day at its peak - 5 percent of Britain's daily production.
It is expected to start production in 2017 and operate for 30 years.
The Mariner field was first discovered in 1982 but technological improvements have only now made it economically attractive to develop the site.
Statoil has a majority stake in the Mariner field. The other partners in the project are Cairn Energy and JX Nippon Exploration and Production.
Statoil expects to make a final decision on investments in the nearby Bressay heavy oil field later this year.
(Reporting by Gwladys Fouche, Additional reporting by Karolin Schaps in London; Editing by Alison Birrane)