Dana Petroleum has entered the detailed engineering design phase on the $1.5 billion Western Isles development project in the UK North Sea.


The Western Isles project will develop two discovered oil fields called Harris and Barra in the Northern North Sea, 160km east of the Shetlands and 12km west of the Tern field. The nine-well development is expected to add more than 26,000 barrels of oil equivalent to Dana’s daily production.


Paul Griffin, Dana’s UK Managing Director said:


“Western Isles is a very important project for Dana and a key part of our strategy to double daily production to more than 100,000 barrels of oil equivalent by 2016. Work on the detailed engineering design will begin immediately and the project is expected to receive full approval from the UK Government towards the end of 2012, with first oil production expected in 2015.”


Charles Hendry, UK Minister of State for Energy and Climate Change said:


“This is great news for UK energy security and UK jobs and joins a growing list of major North Sea projects announced recently. Dana’s procurement strategy will create opportunities for UK companies to compete for key parts of the project. I’m delighted that Dana has demonstrated its commitment to the UK North Sea and we look forward to receiving the final development proposals.”


The Harris and Barra fields are estimated to contain recoverable oil reserves of 45million barrels, with upside potential in the area.


The Western Isles development project is a joint venture between Dana with an operating equity share of 65%, and Japanese upstream exploration and production company Cieco, which holds the remaining 35%.