Aberdeen-based Dana Petroleum has laid the keel for a new $400 million oil production vessel which will produce and store up to 40,000 barrels of oil a day from the North Sea by 2015.

The keel laying of the floating, production, storage and offloading vessel (FPSO) marks a major milestone for Dana’s Western Isles project.

Dana and its partner Cieco are investing $1.6 billion in a nine-well development of two oil fields called Harris and Barra in the Northern North Sea, 160km east of the Shetlands and 12km west of the Tern field.

Dana’s Group Chief Executive Marcus Richards said: “This is a major milestone for Dana and the Western Isles project. We aim to significantly grow our production over the next five years and this project is vital to helping us achieve that goal.”

The vessel will displace around 26,000 tonnes and can safely store up to 400,000 barrels of oil. The hull and topsides of the FPSO are being constructed in China. The project has around 70 per cent UK content overall. The vessel will then be transported to the North Sea where it will begin operations in late 2015.

About Dana Petroleum plc
Dana Petroleum plc, a wholly owned subsidiary of the Korea National Oil Corporation (KNOC), is an international oil and gas business with operations in the UK, Egypt, Norway, the Netherlands and Africa, producing 60,000 barrels of oil a day. Dana’s ambition is to become a leading international oil and gas company operating in Europe, Africa and the Middle East and aims to grow production significantly by investing up to $5 billion over the next five years to increase the size of the company and create value for our shareholder.

About Dana Petroleum UK
Our portfolio in the UK consists of exploration, production and development activities throughout the Northern, Central and Southern North Sea, West of Shetland, and in the Moray Firth. We hold a total of 20 operated and 35 non-operated licences acquired through successful licensing rounds, acquisitions and asset farm-ins. Our average annual production in 2012 was 33,000 barrels of oil per day. Our strategy is to continue to invest in our UK exploration portfolio and convert exploration prospects into reserves and production.

About the Western Isles Project
The Western Isles Project (Dana 77% and Cieco 23%) will develop two discovered oil fields called Harris and Barra in the Northern North Sea, 160km east of the Shetlands and 12km west of Tern field. It involves a subsea development of at least five production and four water injection wells plus two exploration wells tied back to a new build floating production, storage and offloading vessel (FPSO) with oil export using shuttle tankers.

Drilling is expected to begin in 2013 with subsea installation in summer 2014 and FPSO installation summer 2015. Plateau production is expected to add more than 30,000 boepd to Dana’s UK production. First oil is expected in 2015 and the estimated field life is 15 years.