BP, along with its partners Royal Dutch Shell, ConocoPhillips and Chevron, has decided to begin drilling five additional appraisal wells at the Clair field, west of Scotland’s Shetland Islands, North Sea, in a bid to expand the project.

The company and its partners have so far invested nearly $10bn for the giant Clair development and are now planning to spend more than $500m in the two-year appraisal programme.

BP in an e-mail statement said the programme will look at the possibility of developing a third phase, while the drilling of the first well has already commenced, reported Bloomberg.

In the statement, UK Energy Secretary Edward Davey said: "It shows the industry’s commitment to maximise the potential in this area, which could hold up to 17% of our oil and gas reserves."

"Greater Clair proves there is still a long future for oil and gas production in the North Sea," Davey added.

As part of the programme, additional eight to 12 appraisal wells can be drilled, depending on results from the first wells.

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By GlobalData

In 2011, the companies decided to jointly invest nearly £4.5bn in the Clair Ridge to develop a second phase of the project at the field, which was discovered in 1977 and expected to produce more than 120,000 barrels of oil a day.

"As part of the programme, additional eight to 12 appraisal wells can be drilled, depending on results from the first wells."

Designed to continue until 2028, production from the field began from the first phase facilities in 2005 and has produced about 90 million barrels so far. Output from the second phase is anticipated to commence in 2016, peak production of which is estimated to be around 120,000 barrels a day.

BP said it is proceeding with the Clair development because of growing confidence it can extract resources in the technologically challenging field. BP North Sea regional president, Trevor Garlick, was quoted by Fox Business as saying the decision is a major milestone and a further big commitment to the west of Shetland by BP and its co-partners.

"If successful, the appraisal programme could pave the way for a third phase of development at Clair – this is now a real possibility," Garlick said.

The UK government approved tax breaks in 2012 – to boost investment in North Sea fields and reduce imports – including £3bn ($4.5bn) of allowances to encourage development of large and deep fields west of the Shetland Islands.

A recent report by Oil & Gas UK also noted that the investments in the North Sea, made by companies in the wake of tax changes, had hit a 30-year high.

In March 2013, UK-based engineering and project management company AMEC secured a £68m contract from BP and its partners to provide hook up and commissioning services (HUC) for two new Clair Ridge platforms.

Image: Map of the Clair field, located 75km west of Shetland.