An oil exploration firm has made what it has described as the “largest undeveloped discovery” of oil in UK waters.
Hurricane Energy said one billion barrels of recoverable oil could be contained within the Greater Lancaster Area, 60 miles (97km) west of Shetland.
The company hopes to begin production in 2019.
Dr Robert Trice, Hurricane’s chief executive officer, described the find as “exciting times”.
He said: “This is a highly significant moment for Hurricane.
“We believe that the Greater Lancaster Area is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf (UKCS).”
The discovery is significantly larger than the average find in recent years, which has been about 25 million barrels.
However, it is still a fifth of the size of the Forties field, which contains about five billion barrels – of which approximately two billion have been recovered.
Hurricane discovered oil in two wells which sit about 30km apart.
The company believes the oil they found forms part of the same giant field.
Drilling at the Halifax prospect found a column of oil-bearing rock of at least 1,156m. It has been described as “very significant” in an independent analysis.
Operations had to stop for budget and safety reasons, but Hurricane Energy plans to return for further appraisal.
Shares rose 6% in early trading after the Halifax announcement. In the past year, their value has risen five-fold.
Hurricane Energy has focussed its efforts on what it believes are neglected geological formations known as naturally fractured basement reservoirs.
These occur in a series of drilling blocks west of Shetland, which Hurricane has apparently named after RAF aircraft, also including Typhoon, Whirlwind and Warwick.
Lancaster and Halifax lie between the Schiehallion and Solan fields, west of Shetland, and to the south-east of Foinavon.
Hurricane Energy claims to have found more oil in UK waters than any other exploration company over the past 10 years. All its prospects are wholly owned by the one company.
Deirdre Michie, chief executive of industry body Oil and Gas UK, said: “This is extremely exciting and welcome news for the UK Continental Shelf.
“Hurricane Energy’s announcement – coming just days after the Oil and Gas Authority awarded new licences to companies to explore for oil and gas in frontier areas – demonstrates the significant remaining potential of the UKCS.
“Signs of optimism, mainly led by exploration and production companies, are returning to the basin, which has worked hard to reduce its costs and improve efficiency.
“However, the UKCS needs fresh investment so it can capitalise on its potential, whether that be from new geological plays, or from enhanced recovery from existing fields.
“There are still up to 20bn barrels of oil and gas to go after in the UKCS and we believe that makes the basin a very positive investment prospect indeed.”
Paul Wheelhouse, minister for business, innovation and energy said: “Today’s announcements of the first oil from the Flyndre field and the undeveloped discovery within the up to one billion barrels of oil equivalent thought to be recoverable from the Greater Lancaster field make it clear that the continental shelf in waters adjacent to Scotland, such as areas to the west of Shetland, continue to hold very significant potential.
“In total, it is estimated that up to 20 billion barrels of oil equivalent remains under the North Sea and in the wider basin.
“I congratulate both companies on their announcements which further demonstrate Scotland’s oil and gas industry has a bright future, for decades to come.”
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