Oil operation’s development put on hold
Published:
HOPES of an early start to what would be the first commercial oil operation in Caithness have been dashed.
Caithness Oil has been prospecting off Lybster to tap small inshore wells known to exist. A mobile exploratory rig was mounted at Swiney to form a subsea link with the Lybster field, just over two miles away. The £10million exploration 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 low oil price. He said this was counterbalanced by savings which could be achieved through reduced costs for drilling and other inputs.
If the Lybster Field is developed, a nodding donkey-style plant would be mobilised, with the oil taken ashore and stored in tanks before being taken by road to the terminal at Nigg.
Caithness Oil is undertaking the current scheme in a joint venture with Aboyne-based Reach Exploration, which has a 25% share.
The current uncertainty has led to the shelving of plans to set up a community benefit company.
