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The Herald: ExxonMobil and Shell see Starling take to the wing

MARK WILLIAMSON
January 15 2008

Shell and ExxonMobil started pumping gas from the Starling field in the North Sea following a £175m development which, they said, showed they were prepared to invest in the right projects in the mature province.

The two oil majors, which last June announced plans to sell off a portfolio of North Sea assets, hailed the launch of the Starling field on time and on budget as a contribution to meeting the UK’s growing energy supply needs.

The field, which was discovered in 1979, lies 170 miles east of Aberdeen in the central North Sea. It is expected to produce 140 million standard cubic feet of gas daily at peak production.

As North Sea gas production averaged more than 6000 million cubic feet daily in September, according to the latest Royal Bank of Scotland oil and gas index, this is a relatively small contribution.

However, John Gallagher, vice-president technical for Shell Europe and joint head of the North Sea business, said: “It (the announcement) provides further demonstration of our continuous investment in North Sea opportunities, which Shell has the technology and the infrastructure to support, and our commitment to energy supply for the UK.”

John Dashwood, joint interest manager UK/Netherlands, ExxonMobil said: “ExxonMobil has a long-standing commitment to the development of resources in the North Sea. This development makes excellent use of existing infrastructure thereby providing a cost-effective solution.”

The field is tied back to the Shearwater installation 33 kilometres away. It exports gas and liquids to processing facilities through the Seal and Forties pipeline systems.

A spokesman for Shell said the company was in discussions regarding plans to sell its interests in nine North Sea fields, including six owned with ExxonMobil, announced last June. He declined to elaborate, saying the talks were confidential.

Strong oil and gas prices have stoked increased interest in the province from industry players and financiers.

Later this month, the government is expected to launch the 25th UK offshore licensing round and invite bids for a record number of North Sea blocks.

Shell highlighted that Starling had started production safely. It has a 28% interest in the field while ExxonMobil has 72%.

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