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Agenda:

Since the discovery of the Clair Field in 1977, the Atlantic Margin that lies west of the Shetland Islands has been heralded as the next North Sea.

The next major successes in the region were the Foinaven and Schiehallion fields, which were discovered in the early 1990s, with Rosebank/Lochnagar and Laggan discovered a decade later in 2004.

There have also been a number of smaller finds in the region.

Whilst there is no doubt that there is oil and gas to be discovered in those stormy waters, it is also fair to say the discoveries have not come in at the same rate as they did in the neighbouring North Sea.

Some 50 billion barrels have been discovered off the coast of the UK but only four billion of these have been west of Shetland. Estimates of what is yet to be found are modest. So is it fair to write the area off?

Why is it that one part of our continental shelf is so prolific while the other has been less so? The answer comes down to two main factors.

First, west of Shetland is considerably more hostile and remote than the relatively benign waters of the North Sea. Secondly, the geology is more challenging.

For these reasons, only about 100 exploration wells have been drilled on the Atlantic Margin compared to 2,300 in the North Sea.

The North Sea is a mature province while its westerly neighbour is still very much in its youth. So what does this mean for the future?

Put simply, is the west of Shetland the next big oil boom or is it what an "old timer" I worked with in Houston used to call "donkey pasture"? More specifically, can we reliably estimate what is still to find out there?

The simple answer is: no, it's very difficult to be certain. Oil exploration is a fickle and risky business.

On a global average, only one in four exploration wells will find anything. The other three will fail. In frontier areas, the failure rate is far higher.

All but the biggest or boldest companies flock to the areas where oil is proven, and the challenging areas remain largely ignored. But they often contain the biggest prizes.

Exploration is a tough and uncertain business, especially in frontier areas with challenging geology.

But all areas were once frontiers, at the limit of what the engineers could manage and what the geologists could understand.

In the 1960s, a senior BP geologist famously offered to drink all the oil found in the North Sea, so sure was he that the area was barren.

Fortunately for him he was not held to his offer. More recently, in 2006, the super-giant Lula field with five billion barrels was discovered off the coast of Brazil, in a setting where no sane geologist would have thought to look a few years earlier.

The point is that a combination of "new ideas in old areas and old ideas in new areas" can yield game-changing results.

As the UK Government looks to push onshore fracking on to an unwilling public as a means of supplying the country's gas needs, French giant Total is quietly investing £2.5 billion in a new gas processing plant in Shetland to develop the Laggan and Tormore fields.

Similarly, BP and partners are investing £4.5bn to develop the eight billion barrels on the Clare Ridge.

They clearly see potential in the region. Projects such as this can massively increase the focus on an area, encourage further exploration and release locked-up reserves that were previously uneconomic.

The geology west of Shetland might be challenging and fraught with uncertainty.

However, I for one would never underestimate the ingenuity of the explorers and I certainly will not be surprised if major discoveries are made there in the next few years, totally changing the perception of the region and opening up a second major oil boom for Scotland.

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