Michie said Shell's commitment to the North Sea showed the UK Continental Shelf still holds investment potential as improved efficiency makes the area more commercially attractive.
Royal Dutch Shell and ExxonMobil are to invest more than $1 billion in redeveloping the Penguins field in the North Sea, trebling oil and gas output via a new production vessel that should extend the field's life by a decade. Shell said its break-even price is now around $40.
The oil major gave the go-ahead to expansion plans for the Penguins oil field in the Northern North Sea, which will use a floating storage and production vessel to pump 45,000 barrels of oil a day from the field once it reaches its peak production rate, adding to its existing 135,000 barrel a day production.
The Shell-operated Penguins redevelopment is the first major project Shell has announced since 2012, when it made a final investment decision for the Fram field in the central North Sea.
"Penguins demonstrates the importance of Shell's North Sea assets to the company's upstream portfolio", said Andy Brown, director of Shell's oil and gas production.
Energy minister Paul Wheelhouse said the news was a "hugely positive announcement " for both the Penguins field and the "future of North Sea oil".
The Penguins cluster of fields now comprises four drill centers tied back to the Brent Charlie platform.
Shell's production is now around 135,000 boe/d in the UK North Sea after completing the sale of a $3 billion package of assets to private equity-backed Chrysaor last November, Mr Phimister said.
Redevelopment, which is required as the current Brent Charlie platform ceases production, will see eight new wells drilled, which will be tied back to the new FPSO vessel, with natural gas exported via existing subsea facilities and some new pipeline infrastructure.
"In doing so, we will continue to work with the United Kingdom government, our partners and the regulator to maximise the economic recovery in one of Shell's heartlands", he said.
United Kingdom regulators say crude production has fallen 88 percent in the more prolific eastern side of the Penguins field since 2004.
The UK Oil and Gas Authority predicts that it will cost nearly £60bn to decommission the North Sea's existing oil and gas infrastructure between now and the 2050s with tax payers footing about 40 per cent of the bill. Oil will be sent to refineries by tanker and gas will be sent through a submarine pipeline to a terminal in Scotland.
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