Shell to build first manned installation in North Sea for thirty years

Up to four hundred temporary jobs are being created in the North Sea.

Shell's announced it's going to redevelop the Penguins field off Shetland.

It'll also mean seventy jobs on board once operational – it’s the first new manned installation in the North Sea in nearly thirty years.

“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” said Andy Brown, Upstream Director. “It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case.”

Steve Phimister, Vice President for Upstream in the UK and Ireland said: “Shell has had a strong presence in this part of the northern North Sea for more than forty years. Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets. In doing so, we will continue to work with the UK government, our partners and the regulator to maximise the economic recovery in one of Shell’s heartlands.”

Scottish Government Minister for Businesses, Innovation and Energy, Paul Wheelhouse, said:

“I welcome Shell’s hugely positive announcement regarding redevelopment of the Penguins oil and gas field, and the future of North Sea oil.

“This significant investment by Shell and Exxon Mobil is further evidence of rising confidence in the future of the region and it will offer a significant boost to communities across the North East of Scotland, along with boosting the wider Scottish economy.

“We have always maintained there are significant opportunities remaining in the North Sea, even in the context of a low carbon transition, and that a strong and vibrant domestic offshore oil and gas industry will play an essential role in the future energy system we set out in our recently published Energy Strategy.

“Our work to date to support the sector is seeing us invest £90 million in the Oil and Gas Technology Centre, and through further funding for research, innovation and skills development for the sector means that Scotland is now very well placed to capitalise on this investment domestically and in export markets, with opportunities for workers and businesses throughout Scotland’s oil and gas supply chain.

“This continues to remain an important time for the industry, as the sector aims to embed sustainable efficiencies in production costs and we have seen prices stabilise and even increase in recent weeks to, at times, more than $70 a barrel. This latest news, coming as it does after a number of key asset transfers and inward investments, adds further momentum to the recovery and is a sign of Shell’s commitment to the North Sea Basin.”

Deirdre Michie, Chief Executive of Oil & Gas UK, said:

“This is great news and an exciting start to the new year.

“A global leader like Shell making a commitment on this scale demonstrates the investment potential the UK Continental Shelf still holds. It also shows the importance of the efficiency improvements our industry has delivered which have helped make redevelopment projects like this commercially attractive.

“We are hopefully entering a more positive phase for our industry in the UK with new projects on the horizon that I hope will bring a much needed boost for companies in the supply chain."

The Penguins field currently processes oil and gas using four existing drill centres tied back to the Brent Charlie platform. The redevelopment of the field, required when Brent Charlie ceases production will see an additional eight wells drilled, which will be tied back to the new FPSO vessel. Natural gas will be exported through the tie-in of existing subsea facilities and additional pipeline infrastructure.