BP strikes deal to drill new oil well

BP will begin a highly controversial campaign of drilling for oil in the deep waters off the Shetland coast within days, after a green light from the Government.

The oil giant is expected to start exploratory drilling next week in the North Uist field, 80 miles west of Shetland in the "Atlantic Frontier" area, as it seeks to locate commercially viable reserves of oil. Although there have been oilfields west of Shetland operating for nearly two decades, that has been at depths of between 460ft and 1,640ft. BP's proposed well would be more than 4,200ft down.

Opponents are concerned that any spill from a wellhead at this depth could be particularly difficult to control.

Announcing his decision, Energy minister Charles Hendry pointed out that oil and gas made a valuable contribution to the economy, but stressed he was content with BP's contingency plans in the event of a spill.

The green light came the day after George Osborne pledged in the Budget £3bn of support for drilling new "large and deep" fields in the waters west of Shetland. The Department of Energy and Climate Change said North Uist would qualify for a field allowance if it could be established that it contained between 25 million and 40 million tons of oil reserves.