British oil giant BP and partners Shell, ConocoPhillips and Chevron will invest in a two-year appraisal drilling programme in the remote Shetland Islands that are expected to become great contributors to the UK's offshore oil and gas production.
The consortium will invest $500m (£330m / €390m) for the first five appraisal wells in the programme, evaluating the possibility of developing another giant North Sea field. The partners have already committed $10bn for the development of the Clair oil field.
The west of Shetland area is considered vital for the UK economy with its potential to expand the country's energy sector that helps the economy in terms of tax receipts and jobs. The west of Shetland area has more than 1 billion barrels of oil, which is equivalent of reserves under development.
Production will be started in the field over the next one to five years, and the region will be the second largest in the UK in terms of output, according to industry body Oil & Gas UK.
BP said that the companies are confident over accessing the resource in the technologically challenging field.
"This is a major milestone and a further big commitment to the west of Shetland by BP and its co-venturers," said Trevor Garlick, Regional President for BP North Sea.
"If successful, the appraisal program could pave the way for a third phase of development at Clair--this is now a real possibility."
Drilling of the first appraisal well has already started, according to BP. The number of appraisal wells could be raised to between eight and twelve based on results from first five wells.
Clair field's first phase facilities have started production in 2005, after the field was discovered more than 35 years ago, and the output totals about 90 million barrels so far. The first phase facilities will continue until 2028.
Production from the second phase would start in 2016, with an expected peak rate of up to 120,000 barrels a day. BP and its partners hope the appraisal programme will result in a third phase, extending production well beyond 2050.
Oil companies are planning major investments in the yet-to-be tapped UK oil fields, especially in North Sea, where production has fallen by about two thirds since 2000.
In February, Oil & Gas UK said that companies were looking to invest about £100bn on the UK Continental Shelf. In 2013, investment in the oil sector is expected to increase to record £14bn from £11.4bn in 2012.