British independent oil firm EnQuest is to invest £4 billion in a field off Shetland – a contender for the largest investment announced in the UK North Sea this year.

The Government gave the go-ahead to develop the Kraken field estimated to contain 137 million barrels of oil – around 1.5% of the UK’s remaining reserves.

Gross peak oil production is expected to be more than 50,000 barrels per day, with first oil production planned for 2016/17.

Located 78 miles east of the Shetland Islands, Enquest said the project could support 20,000 jobs during its construction and on average around 1,000 operational jobs in the UK for each year of the field’s 25-year life.

Chancellor George Osborne said: “This is a big investment that will create jobs and boost the British economic plan. It is also evidence that our efforts to create a competitive tax regime that gets the most oil and gas out of the North Sea are working.”

EnQuest has a 60% interest in Kraken and its partners in the development are Cairn Energy and First Oil.