Two new oilfields to be developed east of Unst

Oil company Dana Petroleum is to develop two new oilfields in the northern North Sea sector about 50 miles east of Unst.

The so-called Western Isles project will see nearly £1 billion spent on the Harris and Barra fields seven miles from the Tern field.

The oil will not be coming to Sullom Voe even though the fields are close to the Brent pipeline. Instead it will be stored in a floating production platform and offloaded to market by shuttle tanker.

Permission for the development was granted today by the UK government. Drilling on the first of nine wells is due to get under way next year.

When the field project comes on-stream in 2015 it is expected to produce more than 40,000 barrels of oil a day and a total of over 45 million barrels. It is only expected to last 15 years.

Dana said the project had been made possible by the tax concessions for North Sea oil companies made by the government earlier this year.

The company’s group chief executive Marcus Richards said: “The Western Isles project is at the heart of our growth strategy. Unlocking the potential of these new fields is a significant milestone as we aim to double our production to 100,000 barrels a day by 2016.”

Dana operates 20 fields and hopes to expand its interests in the near future including in exploration and production west of Shetland.