Lerwick Harbour welcomes new oil production from Penguins field 

Lerwick Port Authority (LPA) has welcomed the announcement of a new, floating facility to restart oil production at a deep sea field north-east of Shetland.

The Penguins field had ceased production four years ago, but operators Shell announced today (Tuesday) that oil is flowing again — courtesy of new wells and a “modern” floating, production, storage and offloading facility (FPSO), co-owned by NEO Energy.

“Being the closest hub port, we will be expecting to see service and supply vessels using Lerwick for Shell’s operations at the field,” said LPA Harbourmaster Captain Alexander Simpson.

“It is difficult to predict numbers at this stage but hopefully we will see some regular visitors.”

The facility will, Shell said, produce roughly 45,000 barrels of oil a day, as well as enough gas to heat 700,000 homes. The oil and gas giant said it hopes to extract from Penguins for another two decades.

While that oil will be refined overseas, and Penguins’ gas piped directly to the north-east of Scotland the activity is expected to bring more oil support boats into the harbour.

The number of oil rig supply and standby vessels calling in Lerwick dropped more than ten per cent last year, according to the LPA’s annual report — though dive support boats more than doubled, netting the harbour an extra £400,000, compared to 2023.

Shell claim operating the new facility will produce a third less emissions than the previous, standing platform.

“Today, the UK relies on imports to meet much of its demand for oil and gas,” said Zoë Yujnovich, Shell’s integrated gas and upstream director.

“The Penguins field is a source of the secure domestic energy production people need today, and the FPSO is a demonstration of our investment in competitive projects that create more value with less emissions.”

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