MORE oil industry damage caused by the prolonged depression of crude prices manifested on Thursday when North Sea developer Premier Oil announced a massive drop in earnings.
One day after industry giant Petrofac announced losses of £300 million on building the Shetland Gas Plant for Total, Premier have downgraded the value of the Solan oil field west of Shetland.
Premier announced on Thursday losses of almost £600 million last year, compared to £260 million in 2014, blaming the drop in oil prices.
As a result it has written off £400 million from the value of the Solan oil field, which is expected to start production next month after a six month delay blamed on poor weather.
Solan contains an estimated 44 million barrels of recoverable oil that will be recovered over a 20 year period using shuttle tankers loading from a 300,000 barrel subsea tank. The platform will be unmanned after its first year of operation.
Premier boss Tony Durrant said that despite the figures, the company was in a strong position to ride out the low oil price, which is expected to continue for some time.
“Our forward plan includes further actions to reduce debt, positioning ourselves for a prolonged period of lower oil prices, whilst continuing to take actions to build longer-term value for a recovering commodity environment,” he said.
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