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British energy giant BP plc (BP - Free Report) and its partners have handed over contracts in excess of £1 billion to dozens of UK-based companies for a major re-development of the Schiehallion and Loyal oil fields to the west of Shetland.

The firms will be liable to supply services and equipment to redevelop the two oil fields. Since production commenced in 1998, the Schiehallion and Loyal fields have generated about 400 million barrels of oil and another 450 million barrels of resource can still be obtained from the sites on the North Atlantic coastline.

In July 2011, BP and its partners announced their plan to make investments of £3 billion to redevelop both fields in a project known as Quad 204. The funds were be used to set up new facilities that would extend production over the next two decades and beyond.

The revamping of the BP-operated fields, entails two important elements. The first is the replacement of the existing Schiehallion floating, production, storage and offloading vessel with a new one, which is planned for 2015. The new 270-meter long vessel will be able to process and export about 130,000 barrels of oil per day and store over a million barrels.

The second is the major upgrade of the subsea infrastructure. The yield from the new facilities is scheduled to start in 2016.

Among the contracts awarded, the latest includes the one given to OneSubsea for the manufacture of 11 subsea trees in Leeds. This contract is valued at £65 million. It follows awards presented since 2012 to companies based in Aberdeen, Bristol, Fife, Leicester, Newcastle, Shetland, Wirral and other U.K. locations, taking the total value of the contracts to over £1 billion.

The partners in the Quad 204 project are BP, Royal Dutch Shell plc (RDS.A - Free Report) , OMV and Statoil ASA (STO - Free Report) holding 36.3%, 54.03%, 4.84% and 4.84%, respectively.

BP carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) stock Range Resources Corp. (RRC - Free Report) appears attractive for the short term.

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