Oil crisis? What oil crisis? BP has doubled its interest in a North Sea development, despite it being a "challenging time for the industry" (bit of an understatement, that).
The oil giant has acquired an additional 16 per cent interest in the Culzean development in the UK Central North Sea from JX Nippon.
BP is currently in the middle of a five-year, £7bn investment programme in the North Sea region, which has taken a battering in recent times.
Mark Thomas, BP’s president of the North Sea region, said: “This is a challenging time for the industry and we must continue to work together to ensure that when developments like Culzean, or other projects such as BP’s Quad 204 and Clair Ridge, come online they can be run as efficiently as possible.”
BP said the Maersk-operated Culzean field development, which was sanctioned at the end of August 2015, is expected to produce enough gas to meet five per cent of the UK’s total demand at peak production in 2020/21.
Thomas added: “BP has been focusing and refreshing its North Sea portfolio by bringing new fields into production, redeveloping and renewing existing producing facilities and divesting some of its more mature or less strategic assets…
“Our deepening in Culzean further demonstrates our commitment to supporting the development of another UK field for the future.”
Sir Ian Wood, the former chairman of Wood Group, has estimated that a further 45,000 jobs will be lost in the area in 2016 following losses of 65,000 last year.
BP itself cut 600 jobs from its North Sea operation in January, representing around one-fifth of the workforce. Similar cuts have been announced by Shell, Chevron, Talisman Sinopec, Petrofac and others.
BP's annual report in March reported an annual loss attributed to shareholders at $6.5bn, down from a profit of $3.8bn in 2014.
In March, it emerged that the profitability of the North Sea oil sector has fallen to its lowest level since 1997.
UK Continental Shelf firms' rate of return on their investments fell from 1.9 per cent in the third quarter of last year to 0.6 per cent in the last quarter of 2015, according to the Office for National Statistics.