Chevron given go-ahead for west of Shetland drilling

Chevron has been given permission by the UK government to drill the Cambo-5 oil well in deep water west of Shetland.

Today’s announcement is the latest sign of the oil industry’s renewed interest in the vast untapped oil and gas reserves in the so-called Atlantic Frontier.

The Cambo-5 prospect is about 85 miles west of Unst in waters around 1,090 metres deep.

The licence for block 204/5a is held by Hess but Chevron is to carry out the drilling. An appraisal well was carried out last year.

If the field is developed its oil is likely to be exported via Chevron’s big Rosebank-Lochnagar discovery nearby which will be served by a floating production and storage ship and shuttle tankers, although gas could come to Sullom Voe via the Laggan-Tormore pipeline.

Energy Minister John Hayes said it was vital the UK thoroughly appraised all possible new oil and gas resources. He said: “The North and West of Shetland are new frontiers for development in a resurgent UK oil and gas industry.”

Rosebank-Lochnagar is seen as one of the UK’s last great oil and gas reservoirs and is likely to unlock a whole series of other operations in an area where there is currently no production.

The Cambo-5 project is likely to be controversial due to opposition to oil exploration in deep water since BP’s Deepwater Horizon explosion and oil spill in the Gulf of Mexico in 2010 which killed 11 men and spewed out pollution for three months.

Any catastrophe in the Cambo-5 drilling operation could potentially lead to pollution of Shetland’s coastline and seas.

The UK government has given assurances that it has carried out detailed and extensive scrutiny of Chevron’s drilling applications and the Health and Safety Executive has examined the well design and drilling plan with a view to ensuring there are no blowouts.

The energy minister said: “History has taught us there is no cheap short cut for safety and environmental protection in any oil and gas activity. We have always sought to learn from our experiences and lessons from others. As a result the UK has one of the most robust and best regarded oil and gas regimes in the world.”

Chevron had to demonstrate it had taken  into account the findings and recommendations of the investigation reports into the Gulf of Mexico disaster including arrangements for using a blow-out preventer to cap the well.

The government has also inspected the drillship to be used on the well next year and has discussed emergency response procedures.