This latest announcement is welcome news for the UK oil and gas industry as it provides further evidence of the investment opportunities that still exist in the UK.
The Clair field was discovered in the late 1970s and has always been recognised as an area of great potential, but the technical difficulties presented by its position to the west of Shetland and complex reservoir structure prevented its early development.
The wells may only be at the appraisal stage at present, and that must be noted, but you would hope advances in technology, much of which continues to be undertaken on these shores, would enable increased recovery.
You can argue that we are witnessing two major milestones in one day as the news coincides with the publication of the draft Decommissioning Relief Deed, as confirmed in last week’s Budget; a measure that should free up more funds for further investment.
Increased fiscal stability, the flurry of deal activity evident this year and committed attempts to maximise recovery from the UK continental shelf are all grounds for real optimism.
Derek Leith is managing partner at professional service firm Ernst and Young in Aberdeen