Royal Dutch Shell will pile fresh investment into a new North Sea project for the first time in six years to increase its UK oil production by a third.

The oil major gave the go-ahead to expansion plans for the Penguins oil field in the Northern North Sea, which will use a floating storage and production vessel to pump 45,000 barrels of oil a day from the field once it reaches its peak production rate, adding to its existing 135,000 barrel a day production.

The oil can be produced at a cost of $40 a barrel, handing Shell a high return on its sales amid global market prices of almost $70 a barrel.

Andy Brown, who runs Shell’s upstream oil and gas business, said the project is “another example of how we are unlocking development opportunities, with lower costs.”

Shell sold off around half of its North Sea assets to a private equity backed producer, Chrysaor, for around £2.4bn this time last year. However, the oil major has consistently argued that it is not retreating from the North Sea.

Steve Phimister, Shell’s UK and Ireland upstream boss, said the group plans to grow the oil production “in one of Shell’s heartlands” through the core production assets still remaining after the mega-sale.