CONFIRMATION that Hurricane Energy plans to proceed with the first phase of development of the Lancaster oil field West of Shetland will boost sagging morale in the North Sea.
Drilling so far suggests Lancaster could contain 500 million barrels: big enough to persuade other explorers the North Sea might be worth a second look.
City investors saw enough potential in the find to be prepared to stump up $530 million in June to fund the work needed to get an early production system running
Following three years of deep cuts in spending amid the crude price plunge companies in the supply chain will be hoping Hurricane’s decision to go ahead marks a turning point.
But it is probably too soon to attach too much significance to the move.
Hurricane has won backing for a strategy that involves focusing on an under-explored niche area off Shetland at an opportune time.
Success in the fractured basement area the firm targets may not have much influence on how the wider North Sea is viewed.
Hurricane has been able to move fast without spending too much because the cost of support services has fallen sharply since the crude price started tumbling in 2014.
But it may only be after Hurricane has run Lancaster for years that others will be able to draw conclusions about how easy it is to produce from the granite basement the field lies in.
Premier Oil’s experience with the giant Solan development West of Shetland showed just how challenging it can be to bring fields onstream in the area.
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