Capital and operational investment is estimated at £4 billion, 80% of which will be spent in the UK.
EnQuest said the development has been approved by the Department of Energy and Climate Change.
Field development will include 25 wells. EnQuest expects the start of oil production in 2016 or 2017 and gross peak production of 50,000 b/d. EnQuest said the field contains 137 million bbl of oil.
The development will benefit from heavy oil allowances used to stimulate investment in the UK North Sea.
“Companies like EnQuest are the future of the North Sea,” said Amjad Bseisu, EnQuest chief executive officer. “It is only by combining our skills and expertise with fiscal incentives, such as heavy oil allowances, that really substantial projects like Kraken are possible.”
EnQuest said the development will support more than 20,000 UK jobs during the construction period and an average of 1,000 operational jobs in the UK for each year of Kraken’s 25-year life. EnQuest said it relied on reporting metrics by Oil & Gas UK, the offshore trade group.
“This is yet another clear sign that opportunity remains in the North Sea,” said Oonagh Werngren, operations director for Oil & Gas UK.
The Kraken area is west of North Viking Graben, and 125 km east of the Shetland Islands.
EnQuest, the operator, has 60% interest in Kraken; partners are Cairn Energy PLC and First Oil PLC.
Kraken will be EnQuest’s sixth production hub in the UK North Sea.