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Hopes dashed of early start to far north oil industry

Hopes dashed of early start to far north oil industry
Hopes of an early start to what would be the first commercial oil operation in Caithness have been dashed.

Hopes of an early start to what would be the first commercial oil operation in Caithness have been dashed.

Caithness Oil has been prospecting the coast off Lybster to tap small inshore wells known to exist.

A mobile exploratory rig was mounted at Swiney to form a sub-sea link with the Lybster field, just over two miles away.

The £10million exploration, which employed 30 at its peak, has produced positive results of potentially extractable reserves.

What has clouded the picture for the operators has been the ongoing financial crisis which has thrown stock markets into disarray and seen crude oil prices tumble.

Caithness Oil – a wholly-owned subsidiary of London-based Caithness Petroleum – is circumspect in assessing the prospects for its far north operation.

A spokesman said yesterday: “Caithness is continuing its appraisal of the Lybster field, which indicates the eastern side of the field is worth further development work. We are planning to drill a side track to the east of the field to do this.

“We also believe drilling costs will lessen during the year due to the current economic and oil price environment, and we will defer drilling in the very short term to take advantage of this.”

The spokesman said it would be wrong to say development was being held up by the low oil price.

He said this was counter-balanced by savings which could be achieved through reduced costs for drilling and other inputs.

Chief operating officer Peter O’Sullivan revealed last summer that the firm was eyeing other opportunities in the area, including plans to prospect the Knockinnon Field, off Dunbeath.

An earlier geological survey found the Lybster Field could yield between three to five million barrels of oil, and the Knockinnon Field even more

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