Premier Oil has received approval from the UK Department of Energy for the planned development of the Solan oilfield to the west of the Shetland Isles, which should net Premier an additional 24,000 barrels of oil per day by the end of 2014. It also confirms the ongoing value opportunity among smaller players in the North Sea sector.
The Solan development supports the view that we're about to witness a step up in North Sea exploration activity in coming months; a process that was given renewed impetus by the recent tax concessions announced by HM Treasury. Designed to stimulate exploration activity in the North Sea, the budget measures show that the government is finally taking a strategic view of the UK's offshore oil and gas fields. And high oil prices are providing the rationale for further investment in fields once considered marginal. A recent survey carried out by Deloitte Petroleum Services found that exploration for offshore oil and gas deposits in the UK increased 22 by per cent during the first quarter of this year over the comparable period last year.