09-07-01 The fortunes of 45,000 Faroe Islanders are riding on the Sovereign Explorer, an oil rig that will commence drilling the first well in the territorial waters of the Danish protectorate. Statoil, of Norway, has towed the semi-submersible rig from the west coast of Ireland to a position in the Atlantic, west of the Shetlands and near the median line that divides British and Faroes' territory.
A spokeswoman for Statoil said that drilling would take several months to complete and refused to speculate on the outcome: "It is impossible to say, as no one has ever drilled there before."
Seismic studies of the area and the discovery of oil in British territory west of the Shetlands has excited oil companies and the Faroese. Estimates of the possible reserves range from hundreds of millions to billions of barrels. However, Statoil and its partner, Enterprise Oil, are aware that the well could be a costly flop. Statoil is drilling in more than 900 metres of water and the single well is costing the companies some £ 15 mm.

Statoil has been competing with BP to drill the first well in what could be a new European oil province. The Faroes were given home rule by Denmark in 1948 and the Danes have promised that oil wealth will remain with the islanders, whose livelihood is based on fishing and sheep farming.
The promise of oil wealth has excited political activity in the windswept Faroes, which have been inhabited for 1,000 years. A big find could encourage the islanders to sever links with Denmark and an annual subsidy of about £ 100 mm.