The prospect of a resurgence in Britain's long-declining North Sea oil industry received a boost today when the explorer Xcite Energy revealed that its giant Bentley oil field held 134 million barrels more than previously thought – worth about $14bn (£9bn) at current prices.
The latest seismic survey of the Bentley field, 100 miles east of the Shetland Islands, estimates that it contains 250 million barrels of recoverable oil and gas, an increase of 134 million barrels or 115 per cent from last year's estimate of 116 million barrels. The company's shares jumped by 9p, or 8.3 per cent, to 118p.
Although the Bentley field was discovered in 1977, it has not yet produced any hydrocarbons because it contains heavy crude which does not flow easily and is harder and more costly to extract and refine.
However, the sustained high oil price, improving extraction techniques and tax breaks introduced in the 2009 Budget mean it is now commercially viable to exploit the field.
The discovery of an extra 134 million barrels is close to 10 times the average new oil find in the North Sea in recent years – at 15 million to 20 million barrels.
Xcite, which is run by chief executive Rupert Cole, needs about $700m to develop the field and is looking for a partner to help share the cost. The company expects to begin producing oil from the field in the second half of 2015.
The discovery provides a further boost to the North Sea, which is expected to reverse its long-term decline over the next few years.
Although North Sea production is set to dip by as much as 6 per cent this year, to about 1.5 million barrels a day, Oil & Gas UK forecast last week that it will rebound to about two million barrels a day by 2017.