ENERGY Minister Brian Wilson was on Tyneside yesterday for the inauguration of a new oil production and storage vessel.

The Minister of State was at the Swan Hunter yard in Wallsend to see the 700ft-long Global Producer III vessel, which will be used by owners Kerr-McGee to extract oil from the Leadon field, one of the largest developments by any company in the North Sea this year.

However, hopes of Swans winning a new order for another oil platform from Kerr-McGee, which would have created 500 jobs, were dashed with no announcement to be made until next year.

The high-profile presence of a Government minister had led to speculation that he would announce the new contract.

Work on the current vessel began last November and is due to be completed next month.

As well as work for Kerr- McGee, Swan Hunter is working on a £130m MoD contract to build landing vessels.

Together, they represent a turnaround in fortunes for the Wallsend shipyard, which just six years ago was in receivership.

GMB regional officer Kevin Curran said: "I have always maintained that the future for the River Tyne is the brightest in the UK. The Government sees it, with orders from the Ministry of Defence, and the industry sees it.

"They are not coming to the North-East by accident, they are coming here because all the partners are working hard together to maximise our competitiveness."

Speaking at the inauguration ceremony, Mr Wilson said: "The success of Leadon, which is expected to produce 50,000 barrels of oil at its peak, demonstrates that there is still tremendous potential to develop our North Sea oil and gas reserves.

"It is crucial to onshore and offshore jobs that we continue to have new investment like this in the North Sea."

The Floating Production, Storage and Offloading vessel will be used on a field originally discovered in 1979 by the British National Oil Corporation, but thought not to be economic.

In 1998, Kerr-McGee took a fresh look at the field using modern geophysical testing equipment and has since gained Department of Trade and Industry approval for the project.

Production in the Leadon field is expected to begin this autumn.