More than 590 million barrels of oil could be recovered from an oil field west of Shetland, an exploration firm has announced.
Hurricane Energy has tripled its estimate of how many barrels it will recover from the Lancaster field from 200 million in a 2013 assessment to 593 million barrels.
Production is expected to start in the first half of 2019 and reach a daily production rate of 17,000 barrels soon after.
The increased estimate follows Hurricane’s announcement last week that it had made the “largest undeveloped discovery” of oil in UK waters in the Greater Lancaster Area (GLA).
The firm said one billion barrels of oil could be contained within the Halifax well within the GLA, 60 miles west of Shetland.
A survey found oil in two wells about 19 miles apart and says the combined discoveries have proved the presence of a giant field.
“We believe that the GLA is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf,” said Dr Robert Trice, Hurricane’s chief executive.
“The discovery of a 1km (0.62-mile) column at Halifax validates the efforts the company undertook to acquire the licence and drill, test and log the Halifax well through the winter months.”
Hurricane Energy claims to have found more oil in UK waters than any other exploration company over the past 10 years.
The announcement was a boost for the sector in the same week an industry report laid bare the challenges it faced in 2016.
The North Sea oil and gas industry was a net drain on UK public finances for the first time last year.
The slump in oil prices meant the sector received £396m in 2016, net of tax payments, the first year the industry cost the exchequer more than it has contributed, analysis by Carbon Brief found.
Its contribution to the exchequer was £10 billion as recently as 2011.
The sector is no longer “the cash cow” chancellors have come to expect, the report added.
Energy companies can claim rebates on the cost of decommissioning rigs and pipelines as fields come to the end of their natural life.