MORE than a quarter of a century after its discovery, BP's Clair Field is about to begin production, launching a new era in the UK oil industry.

The largest unexploited field on the UK Continental Shelf lies 75 kilometres west of Shetland in 140 metres of water. It has cost pounds-650m to develop, including the creation of a 70mile pipeline to Shetland's Sullom Voe terminal.

When it was first discovered, the 220 square kilometre field posed technical challenges which made it an uneconomic prospect.

Then, after 17 appraisal wells had been drilled and as the technological challenges were overcome in the late 1990s, uncertainty in the industry, primarily concerns over proposed government tax changes, prompted the partners to put their proposals on the back burner.

Late in 2001, BP finally announced it would develop phase one, focusing on the Core, Graben and Horst reservoirs with an estimated 1.75 billion barrels of oil, of which 250 million barrels can be recovered.

That oil was scheduled to flow at the end of last year but bad weather is one factorwhich has delayed progress.

Tonight Mike O'Brien, the energy minister, will attend a ceremony in Aberdeen to inaugurate the field, and start-up is thought to be imminent.

At peak production it will deliver 70,000 barrels of oil per day and will plateau at 60,000 with a predicted life of 25 years.

Clair is tangible evidence that the UK oil industry has a bright future, and a recent air of optimism has swept away the talk of gloom which followed the unexpected government 10-per cent tax rise of 2002.

A close working relationship with the government since then has raised confidence that there is now a clear understanding of the importance of a stable fiscal regime and that there will be no more surprises which halt developments.

"Clair is certainly very important, " said oil economist Tony Mackay. "It is one of the biggest fields to be developed in the last few years and it is particularly significant because it is the first development in the west of Shetland with a pipeline to the shore.

"There is a lot of spare capacity in the pipeline which allows for subsequent phases of Clair to be developed. Any other discoveries in that area could also possibly be tied in to that pipeline.

"The existence of Clair improves the economics of smaller fields in the area which do not justify a stand-alone development."

There have been exciting recent discoveries which could result in further development of the area.

ChevronTexaco found a large oil field with its Rosebank-Lochnagar exploration well and Total has indicated that the Laggan gas discovery - made some years ago and successfully appraised last year - is commercially viable.

Faroe Petroleum also has three promising prospects in Freya, Rannva and Seaonaid, which are all close to Clair and are named after the daughters of company executives.

Some of the dollars-2bn (pounds-1.1bn) BP will spend on its UKCS business this year, and dollars-7bn (pounds-3.9bn) over the next four years, will go on development drilling for Clair.

Malcolm Webb, chief executive of the UK Offshore Operators Association, said: "The remote and geologically complex Clair field is a particularly good example of the continuing need for oil companies with the financial and technical depth to persevere with projects that present tremendous challenges to bring on stream.

"BP is to be applauded for its commitment and determination to see this field through development and into production almost 30 years after its discovery.

"Another chapter in the story of the UK oil and gas industry is opening and its success will depend on the diversity of companies active in the UK continental shelf.

"As the North Sea advances in maturity, and areas to the West of Shetland are further opened up, the industry is likely to make other discoveries in equally testing reservoirs.

"Exploiting such reserves will help to sustain UK oil and gas activity in the future, preserving jobs, generating investment, earning revenues for the exchequer and providing secure primary energy supplies to meet UK demand.

"The presence of companies in the UK willing to rise to the economic and geo-technical challenge is therefore very good news for the country."


The Clair field is the largest discovered, as yet undeveloped, hydrocarbon resource on the UK Continental Shelf.

Discovered in 1977, the field is located 75 kilometres west of Shetland in water depths of up to 150 metres and extends over an area of some 220 square kilometres.

First phase of the development has recoverable reserves of 250 million barrels of oil.

Plateau production is expected to be around 60 thousand barrels of oil a day and 20 million cubic feet of gas per day.