Shares of North Sea oil exploration firm EnQuest rose at least 7% after it confirmed that first oil from the important Kraken development east of Shetland was delivered on June 23.
Kraken is one of the largest new oil fields to come onstream in the North Sea since Buzzard.
EnQuest said gross peak oil production from Kraken is expected to be 50,000 barrels of oil per day.
UK Oil & Gas Authority chief executive Andy Samuel said: “As one of the most significant oil field projects in the UK Continental Shelf, successful production from Kraken is positive news for the whole basin.
“It has the potential to open up additional heavy oil opportunities in the Northern North Sea, with other developments in the pipeline.
“It’s particularly pleasing to see a project delivered under budget, having clearly benefitted from a strong partnership between operator and key service providers.”
Kraken is a large heavy oil accumulation in the UK North Sea located 125 km east of the Shetland Islands.
EnQuest CEO, Amjad Bseisu said: “EnQuest is delighted to confirm that first oil has been achieved on the Kraken development, delivered on schedule and under budget …
“Kraken is a transformational project, made possible by EnQuest’s differential capabilities; the right mix of integrated technical capabilities, high levels of efficiency and cost discipline.
“With production from Kraken, EnQuest is moving from a period of heavy capital investment, to a focus on cash generation and deleveraging the balance sheet.”
EnQuest has 70.5% interest in Kraken, and partner Cairn Energy has 29.5%.
At the time the Kraken development was sanctioned, using Oil and Gas UK’s reporting metrics, it was estimated that the development would support more than 20,000 UK jobs during the construction period of the project and an average of 1,000 operational jobs in the UK for each year of the Kraken field’s life of more than 20 years.
UK Business and Energy Secretary Greg Clark said: “This is a landmark project for EnQuest and the UK oil and gas sector as one of the largest new oil fields to come on-stream in the North Sea in a decade.
“This has been made possible through significant UK government support to encourage investments of this type in the North Sea, supporting thousands of highly-skilled jobs.
“We’ll continue to build on this support for the oil and gas sector as it looks to seize the significant opportunities that lie ahead.”