Shell has announced the redevelopment of an oil and gas field in the UK’s North Sea.

The energy giant will build a floating production, storage and offloading (FPSO) vessel in the Penguins field, the first new manned installation for Shell in the region in almost 30 years.

It says the opportunity presents a break-even price below $40 (£29) per barrel, with peak production expected to hit around 45,000 barrels of oil equivalent each day.

The field currently processes oil and gas using four existing drill centres tied to the Brent Charlie platform.

An additional eight wells will be drilled and linked to the new FPSO vessel.

The field is jointly owned by Shell and ExxonMobil and is located 150 miles off the coast of the Shetland Islands.

Oil will be transported by tanker and gas by pipeline to refineries on the mainland.

Andy Brown, Upstream Director at Shell, said: “Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio.

“It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case.”