A UK energy company is to start drilling at the biggest oil field discovered in the North Sea in at least 20 years in spite of a net zero crackdown on the industry.

EnQuest plans to bring two fields onstream which have the potential to produce 500 million barrels of crude oil over coming decades.

The sites, which neighbour Kraken oil and gas field, 80 miles east of Shetland, will reignite the political battle over the North Sea’s future in which Labour has threatened to block new production citing environmental concerns.

Their planned intervention has prompted warnings from energy companies that the UK risks cutting off its own energy supplies before it has a replacement.

The resulting “Kraken cluster” will have combined reserves larger than either Rosebank or Cambo, the controversial fields west of Shetland which attracted a backlash from environmental campaigners. Cambo was discovered in 2002 with discovery drilling at Rosebank taking place two years after.

Rosebank, which is predicted to yield 350 million barrels of oil, won a production licence last September after months of political wrangling. Cambo, with 170 million barrels of oil, has been in limbo since 2021 when energy giant Shell pulled out of the project because of the green backlash.

It comes as Labour plots a ￡11bn raid on the UK’s oil and gas industry as part of proposals to increase and extend the windfall tax, with the funds invested in “clean power to cut bills for families”.

The party has also proposed to ban new oil and gas drilling licences.

Energy companies are under intense pressure to cut back on oil and gas production and boost investment in renewables as governments race to meet net zero targets.

Wael Sawan, the chief executive of Shell, warned last month that the world is at risk of energy shortages unless more money is invested in drilling for oil and gas.

EnQuest’s two new sites, Bressay and Bentley, are so close to Kraken that they can all be connected to the same production system, based around the giant ship already serving as a floating oil platform for the Kraken field.

EnQuest said Bressay was “one of the largest undeveloped oil fields in the UK continental shelf” with so-called oil-in-place estimated to be between 600 million and one billion barrels.

Oil-in-place measures the total oil in a reservoir but the amount extracted from Bressay is likely to be around 200-300 million barrels.

Bentley, the second nearby field, is thought to be even larger, capable of producing more than 300 million barrels, putting it on a par with Rosebank.

Those amounts are in addition to the 137 million barrels already being extracted from the original Kraken field. It means the cluster could produce more than 700 million barrels of oil.