A £1 billion project to develop two oil fields in the North Sea has been given the go-ahead.
The Department of Energy and Climate Change has approved the Western Isles project which will develop two discovered oil fields called Harris and Barra in the Northern North Sea, 99 miles east of the Shetlands and seven miles west of the mature Tern field.
The nine-well Western Isles development is expected to produce more than 40,000 barrels of oil equivalent.
Development of the new oil fields has been described as a 'significant milestone'
It will add more than 30,000 barrels a day to producer Dana Petroleum's output when it comes on stream in 2015.
The green light for this project follows tax measures announced by HM Treasury during 2012, which Dana has praised for helping to support and increase investment in the North Sea.
Dr Marcus Richards, Dana's group chief executive, said: "The Western Isles project is at the heart of our growth strategy.
"Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016.
"We welcome the announcements by the Treasury this year to support oil and gas companies operating in the North Sea.
"This will help create a brighter future for the industry."
Economic secretary to the Treasury Sajid Javid said: "The North Sea is a vital national asset, with oil and gas production supporting a third of a million jobs.
"That is why this government has announced a range of tax measures expected to generate billions of new investment and create jobs.
"Dana's announcement today is a further endorsement of that strategy."
John Hayes, UK minister of state for Energy and Climate Change, said: "I am delighted to announce the go-ahead for this project which will bring new jobs and create new opportunities for UK companies to compete for key parts of the work.
"Dana Petroleum has really demonstrated its commitment to the North Sea and, in doing so, is playing its part in helping to secure the UK's future energy needs."
The Harris and Barra fields are estimated to contain recoverable oil reserves of more than 45 million barrels.
The Department of Energy and Climate Change also approved Dana as operator of the Western Isles development project, which is a joint venture between Dana with an equity share of 77%, and Japanese upstream exploration and production company Cieco, which holds the remaining 23%.
Meanwhile, Scotland's first minister welcomed the approval of another investment of nearly £1billion in the North Sea by a Chinese company.
Sinopec's US$1.5bn (£926 million) joint venture with Canadian-based Talisman Energy has been approved by the UK government and industry regulators.
The deal was first announced in July and the companies said the focus of the venture will be to invest and extend the life of North Sea assets Talisman already operates, including 11 offshore installations.
Talisman president and chief executive Hal Kvisle said: "We are very pleased to be partnering with Sinopec in the UK North Sea.
"This transaction supports a number of Talisman's key priorities. The proceeds will be used to strengthen our balance sheet, fund our global capital programme and give us the financial flexibility to invest in future opportunities.
"Sinopec will now fund 49% of the UK capital programme, allowing us to increase overall investment in the assets, which will lead to improved operational performance and a stronger UK North Sea business. We look forward to working with Sinopec in the years ahead."
First minister Alex Salmond said: "This partnership between Sinopec and Talisman is exciting news for the North Sea sector and demonstrates that there is still a long and valuable life to be had in extracting reserves from around these islands.
"This is just one of many emerging opportunities which is continuing to prove that Scotland's expertise in the oil industry has a bright future and I am confident that well over half of the value of hydrocarbons are still to be realised from the waters around Scotland."
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