BP awards £1bn to Atlantic oil field firms THE development of oil and gas reserves in the Atlantic Frontier west of Shetland reached a major milestone today as oil giant BP announced that a staggering £1 billion has now been awarded to UK-based companies on contracts for its Schiehallion and Loyal oil fields in the area. The two fields in the north east Atlantic have already produced nearly 400 million barrels of oil since 1998. And BP believes another 450 million barrels of oil could be extracted from the two fields to the west of Shetland as a result of major redevelopment plans. The project to redevelop the two fields, which are operated by BP on behalf of its partners, involves two main elements: a brand new floating production, storage and offloading vessel and a major upgrade of the subsea infrastructure on the seabed. The £1 billion contracts milestone was reached today with the award of a £65 million contract to OneSubsea to manufacture subsea trees at the company's facility in Leeds. Over the past two years substantial contracts have also been awarded to companies based in Aberdeen, Fife, the Wirral, Newcastle, Leicester, Bristol, Shetland and many other parts of the UK. Trevor Garlick, BP's Regional President for the North Sea, said "The UK-based subsea engineering industry offers great expertise and capability and is fully engaged in developing highly-advanced equipment that will ensure we maximise recovery from this field until 2035 and beyond. It is great to see more than 30 companies from all parts of the UK working together to contribute towards this important offshore project. Business Secretary Vince Cable said: "As I saw for myself at the Offshore Europe conference in Aberdeen last week, Britain's oil and gas industry continues to thrive. Its expertise and innovation is impressive. Employing over 400,000 people and providing the majority of our energy needs, the Government's industrial strategy will help keep this important sector growing. An important part of the strategy is reenergising the British supply chain. I want to create the conditions for the SMEs across the country to flourish in a highly-competitive global market. So it's encouraging that the UK supply chain have played a major role in the development of BP's Quad 204 project and I hope more will follow. A BP spokesman said: "The Schiehallion and Loyal fields have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available, more than was originally thought. In July 2011 BP and partners announced their intention to invest around £3 billion to re-develop the Schiehallion and Loyal fields. The investment will go in to new facilities that will enable production to be extended out to 2035 and possibly beyond. The existing Schiehallion Floating, Production, Storage and Offloading (FPSO) vessel is to be replaced with a new FPSO, which is scheduled to be installed in 2015. The new vessel will be able to process and export up to 130,000 barrels a day of oil, and store in excess of one million barrels.. The new subsea facilities are scheduled to start production in 2016 and 25 new wells are to be drilled between 2014 and 2020.