Local heroes drill oil the giants ignored

High prices and land-based technology make Moray Firth find exploitable

In a plotline that echoes the film Local Hero, about a Texan oilman buying a Scottish beach to build an oil refinery, Lybster, a small community in Caithness, is lending its name to a new North Sea oil field which it is hoped will produce several million of barrels over the next decade. But unlike every other field in Scotland, as of next month this one will be drilled from the land for a fraction of the cost of its offshore neighbours.

‘It is a great boost for Caithness,’ said David Bremner, the local SNP member on Highland council. ‘The economy of the area has been held up by nuclear energy, thanks to Dounreay, since the Fifties. Now we expect to lose up to 500 jobs from Dounreay over the next four to five years and eventually over 2,000 will go as the plant is decommissioned.


Oil Well Flaring Gas Near Lybster, Caithness

‘If we can diversify into oil and gas, and the company uses local firms in its supply chain, then we are all for it. As long as it is handled in an environmentally friendly way, I don’t anticipate anyone locally having a problem with it.’

The fact that Caithness Oil, a London-based company with interests in Scotland and Morocco, is bothering with the Lybster field at all reflects just how valuable oil has become. The field, in the Inner Moray Firth, north of Inverness, was discovered two decades ago but was considered too expensive by the major oil companies to drill using offshore platforms.

However, as the bigger multi-nationals have slowed their exploration of the North Sea, the Westminster government has begun encouraging independent firms to pursue smaller fields in the hope of striking it big.

While this has sparked fears among environmentalists that further exploration of the Inner Moray Firth could affect the local populations of bottlenose dolphins and porpoises there, industry insiders believe that, with demand for oil continuing to rise, further development is inevitable.

The Lybster project has been made possible by recent technological advances allowing it to be only the second oil field in the UK to be drilled from the land and the first in Scotland. Using an ‘extended reach’ system similar to one at Wytch Farm, Dorset, the Lybster platform will be positioned onshore with the drill extending out more than two kilometres to the well.

In a relatively small operation, the oil is likely to be then transported by road to a refinery, keeping the impact on the local community to a minimum.

Caithness Oil’s chief operating officer, Peter O’Sullivan, said: ‘This avoids many millions of pounds in development capital, as onshore production facilities are much cheaper to construct and install. It also reduces the lead times required to develop the field, as onshore production facilities are much less complex than offshore facilities.’

High oil prices have led to increased oil exploration across the world – and the cost of drilling rigs has skyrocketed. ‘Rising oil prices are likely to increase the number of discovered oil fields which are considered economic to develop,’ O’Sullivan added. ‘Operating costs for onshore facilities like Lybster are much lower, and therefore the field can continue to produce oil as production rates decline for much longer than would be the case offshore.

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