OIL and gas independent Siccar Point has started an exploration drive that has generated huge excitement in the industry amid hopes there could be massive amounts of reserves to be produced off Shetland.

The company has launched a drilling programme that will target two big prospects that could help unlock the potential of a frontier area that sector watchers reckon could help ensure a bright future for the industry.

Success for Siccar Point in the programme would encourage other firms to step up the hunt for finds off Shetland. It could also help reduce the risk that existing discoveries that have not been developed are squandered.

Read more: Bumper gas find stokes excitement about West of Shetland frontier

The North Sea oil and gas industry badly needs the kind of boost that would result. Firms are still grappling with the fallout from the crude price plunge that started in 2014.

North Sea exploration drilling fell to a record low last year as firms slashed spending.

Both prospects targeted by Siccar Point could contain huge amounts of oil and gas. However, the location of the prospects means that success on either could have wider significance.

The first well will target the Blackrock prospect. This lies close to the massive Rosebank find, which has been described as one of the biggest undeveloped finds on the UK Continental Shelf.

Rosebank lies beneath deep water about 80 miles north-west of Shetland and is estimated to contain around 300 million barrels oil but would be very challenging to develop.

Read more: Chevron casts doubt on £6bn Rosebank oil scheme

The resources held in Blackrock could tip the commercial balance in favour of bringing Rosebank into production as part of a bigger project.

The second well is targeting the Lyon prospect around 120 miles north of Shetland. Siccar Point has said this could be big enough to justify investing in a production hub on the scale of the massive Laggan Tormore development that Total completed West of Shetland.

The hub could help encourage firms to invest in a range of other fields in the area that may not be big enough to justify stand-alone developments.

“We see significant potential in the West of Shetland basin,” said Siccar Point chief executive Jonathan Roger, who noted the firm is investing in assets it thinks will continue to produce out to the 2050s.

Siccar Point also has interests in the BP-operated Schiehallion field, which is in production West of Shetland, and the Mariner field that Norwegian giant Equinor is developing East of Shetland.

The results of Siccar Point’s drilling will be studied closely in the North Sea industry after experts underlined the significance of its programme.

Kevin Swann, senior analyst at the Wood Mackenzie consultancy said: “Estimates suggest Blackrock could contain more than 200 million barrels of oil, making it one of the most high-profile wells due to be drilled in the UK this year.”

He added: “The West of Shetland region is a bit of a hotspot in the UK right now with some big oil and gas fields like Clair and Schiehallion already producing. There was also exploration success last year with Total’s Glendronach discovery.”

Industry body Oil & Gas UK said the Blackrock well could help to boost exploration in a frontier area where there is significant potential to expand current oil and gas production.

Operations optimisation manager Katy Heidenreich said: “It’s encouraging to see companies working collaboratively to progress opportunities West of Shetland, helping to improve the chances of adding another generation of productive life to our basin.”

Read more: Heavyweight financing for newcomers Siccar Point

Siccar Point was founded by Mr Roger in 2014. He won an initial $500m backing from international financiers for a plan to capitalise on the opportunities created by the downturn.

The firm established big positions off Shetland through the acquisition of the UK portfolio of Austria’s OMV in 2016 .

The company has said the results of an appraisal well drilled last year on the Cambo prospect close to Rosebank were extremely positive. Shell bought in to the acreage last year.

In October Equinor showed huge confidence in the potential of the West of Shetland area by acquiring Chevron’s 40% interest in Rosebank.

Read more: West of Shetland deal provides big boost for oil and gas industry

Chevron shelved plans to develop the field in 2013 months saying the project was not then economically attractive. The US major is selling other North Sea assets as it shifts investment to the shale fields of Texas.