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Big losses at Premier

The Solan rig west of Shetland, which will be unmanned after its first year of operation.

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.