DECC Approves Shell for Fram Field

Shell will increase the UK's daily production of hydrocarbons by two per cent, the Department of Energy and Climate Change (DECC) has said, after the DECC approved Shell to develop the Fram field.

The Fram oil and gas field, which lies off the East Coast of Scotland and is held under the UKCS block 29/3c and block 29/8a licences, is expected to produce an approximate 35,000 barrels of oil equivalent per day. That production is expected to begin within the next three years.

The Fram field was one of the first gas discoveries made in the UK North Sea, having been first discovered in 1969. Though the well was previously explored and found to have sizable reserves of both oil and gas, it was deemed by then licence holders Shell and Esso to be uneconomic due to its structure and other issues. The field was again appraised in 1999 and tested at a flow rate of 18.6 million square cubic feet per day of gas and 1473 of gas condensate barrels per day. Even then, the discovery was not pursued as further evaluation of the discovery was need.

However, following 3D seismic and other study in 2007 and 2008, the field has now been deemed commercial and approval has been granted yesterday to Shell to develop the field. 

UK Energy Minister John Hayes welcomed the news saying that the field could help to ensure supply and security of that supply for the UK.

"The durability of oil production in the North Sea constantly confounds expectation," he said. "It is a tribute to the high-tech advances and expertise of British industry, which has constantly pushed the boundaries of what can be produced.

"Fram itself will add around two per cent to our oil and gas production - securing jobs, creating revenue and adding to our security of supply. This announcement shows that by working with industry and by creating the right fiscal environment, our oil supplies will continue to be an asset to Britain for years to come."

Welcoming news of the approval, Shell's Vice President for Technical Europe, Glen Gayley, said that Shell was committed to developing supply from the UKCS.

"This is an exciting announcement for Shell and a positive demonstration of our commitment to technological innovation as we pursue field developments in the UK," he said. "Large developments such as Fram will stimulate supply chain and employment opportunities in this latest phase of development for the UK continental shelf."

Shell is the operator of the Fram field with a 32 per cent stake. Partner in the field, Esso Exploration & Production UK, a subsidiary of ExxonMobil, holds a larger stake of 68 per cent.