* BP CEO highlights North Sea growth opportunity
* Investment could help slow N.Sea production decline
* BP upbeat on future North Sea oil production
* UK PM says discussions needed on marginal fields
* BP shares down 2.1 pct
By Tom Bergin and Sarah Young
LONDON, Oct 13 Britain has given BP the
go-ahead for a 4.5 billion pound ($7 billion) North Sea oil and
gas project that confirms interest in the region despite tax
rises and could slow the decline in output there.
BP and its partners on the project, Shell ,
ConocoPhillips and Chevron , will now enter the
second phase of the Clair Ridge project, the development of a
field west of the remote Scottish Shetland Islands.
A 12 percentage point tax hike earlier this year led to
howls of protest from the oil industry and predictions of a big
drop in investment and an acceleration in the recent decline in
North Sea output.
Giving an upbeat assessment of its future production from
the North Sea, BP said on Thursday that the investment it was
making in this and three other projects would be the highest
annual investment it had ever made in the UK North Sea.
"After some years of decline, we now see the potential to
maintain our production from the North Sea at around
200,000-250,000 barrels of oil equivalent a day until 2030,"
said BP chief executive Bob Dudley in a statement.
BP produced over twice this level at its high point, and
before Thursday had not previously issued a North Sea production
goal, a spokesman said.
North Sea production peaked in 1999 at around 6 million
barrels of oil equivalent per day, and big oil companies have in
recent years preferred to open up newer oil provinces with more
However, BP chief executive Bob Dudley is under pressure
from investors to show the company has growth opportunities,
with shares at the level when the company's doomed Gulf of
Mexico well was capped, and the company has been aggressively
promoting every new deal.
The investment in the Clair Ridge project could also go some
way to help slow the rate of decline of North Sea output.
BP is only one player among many in the area, which is
increasingly dominated by smaller companies. With oil services
companies reporting strong demand across the board, Dudley's
output aim suggests some pessimistic predictions will now be
Oil & Gas UK had said British oil and gas output could fall
to around 500,000 barrels of oil equivalent per day (boepd) by
"A confident outlook for the group (BP) from what is often
considered a mature and declining region with limited upside or
support for oil major portfolios," said Santander analyst Jason
Shares in BP were 2.1 percent lower at 403.3 pence at 1400
GMT, lagging the European oil and gas sector, which was down 1
UK Prime Minister David Cameron, who visited BP's Aberdeen
offices earlier on Thursday, welcomed the project and said the
investment would provide a "massive boost for jobs and growth"
in the country.
Unemployment in Britain is at its highest level in 17 years
as the economy teeters on the brink of recession
"It shows the confidence that there is to invest in the
North Sea," said Cameron, who was due to take part in talks with
oil and gas firms on Thursday afternoon.
On the matter of taxes on the industry, Cameron gave hope
that some further allowances may be made for marginal fields.
"Some discussions need to take place about how you put in
place the things that will make a difference at the margin," he
said at the press conference.
Environmental group Greenpeace criticised the government for
sanctioning the project, arguing that it contradicted the
coalition's promise to protect the environment.
A parliamentary report in January highlighted doubts about
the ability of oil spill response equipment to function in the
harsh environment west of the Shetland Islands.