Oil giant Chevron has been given the go-ahead to drill a deepwater exploration well west of Shetland.
The Cambo-5 well, which is nearly 90 miles from the islands, will be Chevron’s latest attempt at drilling the Cambo prospect, where operations were halted last year. It is thought bad weather was to blame for the disruption..
Chevron’s approval comes as BP continues to drill its North Uist exploration well, west of Shetland, which could end up being among the most costly wells in the UK after the project hit delays in the summer and could run into December. Deepwater drilling in the area west of Shetland has attracted criticism from environmentalists, especially in the wake of the Gulf of Mexico’s Deepwater Horizon disaster in 2010. However, oil and gas fields in the area are estimated to contain about 20% of the UK’s remaining reserves.
The Cambo-5 well will be drilled by the Stena Carron drillship. Cambo is operated by Hess but the drilling campaign is managed by Chevron.
Chevron’s application to drill had to meet Department of Energy and Climate Change criteria, including taking account of the findings from Deepwater Horizon – specifically relating to blowout prevention management and well cementing. Giving Chevron the go-ahead, Energy Minister John Hayes said: “The north and west of Shetland are new frontiers for development in a resurgent UK oil and gas industry.”
Oil prices fell more than 3% yesterday as problems facing the economies of the US and Europe darkened investor sentiment a day after the re-election of President Barack Obama.
Brent futures were down $4.25 to settle at $106.82 a barrel, while US crude fell $4.27 to close at $84.44.