YESTERDAY'S update from North Sea-focused Faroe Petroleum will do little to boost hopes that a recovery is in sight in the waters off Scotland but confirms some firms still think there is lots to go for.

The company’s chief executive Graham Stewart gave a sober assessment of the prospects for oil prices, which started tumbling in June 2014.

Amid hopes that major producers such as Saudi Arabia will agree next week to curb production, Mr Stewart appears resigned to prices increasing slowly at best.

With crude trading at around $45.50 per barrel yesterday the days of $100 per barrel oil look likely to remain a distant memory.

Mr Stewart, however, reckons the fall in the prices of oil and gas fields and services such as drilling triggered by the crude price plunge has created opportunities for firms with cash to exploit.

Faroe has cash and seems confident it can use it to good effect developing North Sea fields for much lower budgets than would have been required in the past.

The company increased its exposure to two UK fields last year.

However, the firm’s growth plans seem to be increasingly focused on Norway, a country which offers explorers generous tax breaks.

Faroe used to make much of the fact it had acquired extensive acreage in the relatively under-explored waters off Shetland, where experts believe there are huge amounts of oil and gas to be found.

Giants such as BP and Shell are spending billions bringing finds made off Shetland into production. But the developments were sanctioned years ago, mainly because BP and co expect to be able to produce oil from such giant finds much more cheaply than from older fields.

The Wood Mackenzie consultancy said majors are choosing only their best prospects for drilling, with an emphasis on wells close to existing fields.

The fact Faroe said nothing about Shetland yesterday suggests it will take a much stronger oil price recovery than Mr Stewart seems to be expecting to prompt independents to return to the exploration fray off the islands.