'Major new oil strike off Shetland for Encore'

A MAJOR oil discovery off the Shetland Islands is expected to be announced this week by the UK explorer that in June was a lead member of the consortium that made the biggest North Sea find of the past decade.

Encore Oil, whose share price has tripled since the 300 million barrel Catcher field was found, is again in partnership on the latest find with Wintershall, the oil arm of German chemicals giant BASF.

Industry sources say the consortium, which also includes Canadian firm Sterling Resources and Dyas of Norway, will reveal that the Cladhan field, north-east of the Sheltands, holds between 100m and 200m barrels.

Analysts said a further big oil strike by Encore Oil and Wintershall would likely send the London-listed company's share price soaring again and perhaps trigger fresh takeover activity in the sector.

The Korean National Oil Company is already targeting Aberdeen-based Dana Petroleum with a hostile 1.7 billion-plus takeover bid.

When the Catcher field was identified two months ago it was hailed as the largest find in the North Sea since the discovery nine years ago of the 550m-barrel Buzzard reservoir, 60 miles off Aderdeenshire.

A spokesman for Encore Oil declined to comment yesterday. The company's share price closed on Friday up 1.75p, or 2.7 per cent, at 66.25p. That compares with a 52-week high of 68.75p.