GDF SUEZ £1.4bn joint venture confirmed among major UK energy investments at London business summit

The company, together with its joint venture partners Centrica and Bayerngas, plans to extract 18 billion cubic metres of shallow water gas from the Cygnus field in the Southern North Sea. The project, worth an estimated £1.4 billion, will indirectly create up to 4,000 jobs according to the companies.

Further energy projects to be announced at an oil and gas summit at the British Business Embassy in London include the creation of a new International Centre for Advanced Materials (BP-ICAM) by BP and an investment into Scottish elastomer production worth €50-60m by Italian petrochemical company Versalis.

The announcements follow the creation of a new tax relief for operators of shallow-water gas fields in the UK Continental Shelf by the Government last month and precede the publication of a longer-term strategy for gas in the UK.

"The North Sea remains a vital source of the nation's energy security and our expertise is renowned the world over," Energy Secretary Edward Davey said. "The Government is determined to maintain the best possible investment environment to ensure we capitalise fully on this national asset. The go-ahead for the Cygnus field is terrific news and will contribute substantially to the UK's gas needs and support thousands of high skilled jobs."

GDF SUEZ has, the Government said, signed a Field Development Plan (FDP) outlining initial contracts for the development of the field worth a total of £375m. £337 of this initial investment will be invested in the UK and directly create more than 1,200 local jobs. An FDP authorises new oil and gas fields and ensures no adverse environmental consequences.

The oil and gas summit is one of 18 organised by UK Trade and Investment (UKTI), the Government's overseas trade and investment arm, to promote British business during the Olympic and Paralympic Games. Attendees will discuss technology-specific issues related to regulatory and market reforms, financing needs, deployment challenges and the scaling up of industrial capacity.

The Government has previously stated its commitment to oil and gas generation in the UK, and has announced a package of measures aimed at encouraging long-term investment in North Sea oil and gas resources. The Treasury is currently consulting (42-page/ 273KB PDF) on the creating of Decommissioning Relief Deeds, which will contractually set out the levels of relief that companies will be entitled to claim once a facility is decommissioned, while additional tax incentives for oil investors were announced as part of the 2012 Budget.

Business Secretary Vince Cable welcomed the announcements, which he said underlined the oil and gas industry's immense contributions to the UK's skills base, industrial capacity and strength as an exporter. The creation of the £60m BP-ICAM, which will operate out of the University of Manchester, supported the UK's status as a "driver of innovation", he added.

"Collaboration between business and higher education institutions is boosting the status of the UK as a driver of innovation, and giving our firms a competitive edge," he said. "I'm pleased that BP has chosen to partner with a number of our world class universities to find new and more efficient ways of using and generating power."

BP will support the centre, which will have 'spokes' in other universities around the world with specific areas of expertise in the use of advanced materials in the energy sector, with a guaranteed £60m investment over 10 years. Advanced materials are those with superior qualities such as toughness, hardness, durability and elasticity and will, according to BP chief executive Bob Dudley, be "vital" in producing and processing energy safely and efficiently in the years ahead.

"Energy producers will work at unprecedented depths, pressures and temperatures [in the future]; as refineries, plants and pipeline operators seek ever better ways to combat corrosion," he said. "Manchester has world-leading capabilities and facilities in materials and it was chosen after a global search to act as the 'hub' of the centre, with 'spokes' in other university departments worldwide. We look forward to building a very productive partnership between our professionals and the academic team at Manchester."