Faroes Petroleum, the oil exploration minnow, is aiming to become the first Scottish company to float this year, with a listing on the Alternative Investment Market in the summer that would value the company at up to (pounds) 60m.

The Aberdeen-based company will try to tempt investors with the prospect of vast untapped reserves off the Faroe islands, where it is one of a handful of oil firms holding exploration licences.

After achieving renown in his mother's homeland as a rock guitarist, Graham Stewart of Faroes Petroleum hopes for celebrity on a wider stage as an explorer of the islands' depths.

''In the Europe the only place where anyone is doing serious exploration is exactly where we are,'' said Stewart, who was finance director at Dana Petroleum, the exploration and production company, before becoming Faroes Petroleum's first chief executive in January.

He wants to raise funds for initial exploration work on a licence Faroes Petroleum holds with Agip, the Italian giant. He hopes to begin drilling with a test well 50 miles north of Scotland in June.

No commercial finds have yet been made off the semi-autonomous Danish province. But finds off the Shetlands such as BP's Foinaven in the 1990s have attracted majors to Faroes waters, undeterred by the absence of infrastructure to get oil to market.

According to Stewart, the fledgling explorer is already weighing up offers from bigger fish for a piece of the action. ''There are offers being considered and discussions are under way,'' he said.

Last month 3i demonstrated faith, with (pounds) 4.5m funding for a 15% stake before Faroes Petroleum even came close to getting a drill-bit dirty.

Stewart expects to create a sizeable exploration specialist by leveraging success off the Faroes to fund drilling along the unexplored Atlantic margin, from Norway to Ireland.

The 42-year-old got to know the Faroes as a schoolboy. During two years living in Torshavn he achieved celebrity status as a member of the islands' pre-eminent ''progressive rock'' band, Chadwar.

A sound grounding in the risks of oil production followed from spells offshore with the likes of Schlumberger, before moving to the Petroleum Studies Institute (PSI). While working as a researcher at the government-funded oil and gas think-tank he met Tom Cross, who went on to found Dana as a high-risk explorer of provinces like offshore west Africa.

Stimulated by BP's success off the Shetlands, at PSI the two men followed their noses north-west and further out into the Atlantic margin.

'' Looking at the geology you could see deep water areas were those where big plays would be emerging,'' said Stewart. ''It was clear the area beyond BP's find would be prized, and we set out to figure out the best way to capitalise on that opportunity.''

Stewart's Faroese roots provided a way forward in working with locals excited by the possibility of oil but with no idea how the industry worked.

''It was a case for them of 'how do you do that?' You're a fishing nation, you don't know anything about oil,'' he said.

So Dana, at which Stewart became a director in 1997, provided technical support for Foroya Kolvetni, a Faroese venture formed to bid for licences. In the run up to the islands' debut round, Stewart lent his expertise and contacts while juggling work with married life. An unnamed New York fund invested $3m ((pounds) 1.9m) to fund seismic studies.

Dana took an option to buy shares in Foroya Kolvetni, which laid off much of the cost of exploration by taking a 7% stake in a successful partnership bid for two licences in 2000.

Since then, drilling by BP, Statoil, and Amerada Hess has been inconclusive. None of the wells has located oil in any quantity, although Hess has still to appraise one find.

Despite ditching plans to incorporate in the UK and float in October 2001, Stewart felt bullish enough to leave Dana to head Faroes Petroleum. He became chief executive when the Faroes venture's assets transferred to a UK limited company in January. Dana invested (pounds) 2.5m then for a 20% stake. Faroese investors have just over half the equity, while the New York fund retains a 24% stake.

Stewart discounts the initial drilling disappointments, suggesting some rivals may be being canny about alerting others to the area. Concerns about infrastructure costs could be addressed by using floating production systems until pipelines are laid.

Stewart gave up a well-paid post and made an investment he says was ''small absolutely, but huge personally'' for a 1% stake in the venture. ''I would have kicked myself if I hadn't done it,'' he said.

Noting that investors have previously shown enthusiasm for early stage plays like Dana, he hopes Faroes Petroleum can raise (pounds) 10m-plus in exchange for 25% of its equity in an Alternative Investment Market listing.

The money will pay for its share of the (pounds) 20m cost of the first well, and leave plenty to keep trying if that hole is dry.

''There are considerable reserves up there, we just need to understand the geology,''

he said.