A group of British companies has made what could be the largest North Sea oil field discovery in nearly a decade.
Encore Oil, a London-listed explorer that led the drilling operation, is expected to tell the market this week that its Catcher prospect, off the east coast of Scotland, holds up to 300m barrels of oil, about 150m of which is extractable. Based on Friday’s oil price of $76.66 a barrel, that would be worth $11.4 billion.
According to industry sources, the company and its partners now plan to drill another two to three wells on neighbouring geological structures. This will determine whether the discoveries are part of a single petroleum system that could hold up to 800m barrels. The company declined to comment.
Even without further drilling, Catcher is among the largest discoveries since the billion-barrel Buzzard reservoir, 60 miles off the Aberdeen coast, in 2001.
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Buzzard was discovered by the same management team that have found the new field. They later sold the company they ran, called Encana, and then set up Encore.
The news will give a fillip to ministers, who are desperate to lure companies back to the declining North Sea basin.
Encore’s shares doubled this month after an initial well on Catcher found a 100m-barrel reservoir. It and its partners in the field — Premier Oil, Wintershall, Nautical Petroleum and Agora Oil & Gas, a private firm backed by Lord Rothschild — then drilled sideways, finding the new deposits in the Catcher East well.
The discovery could provide a fillip to government efforts to revive interest in North Sea exploration, where production has been falling since its peak in 1999.
Last year the region yielded 2.5m barrels a day, about 3% of global demand. Big oil producers have begun reducing their stakes there as they turn their attention to more promising areas, such as West Africa, Brazil and Australia.
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Several North Sea oil field auctions over the past year have failed for lack of interest and the industry has called for tax breaks to attract new developers.
Premier is the majority owner of the well, with a 35% stake, but Encore is the lead operator.