Oil industry enthusiasm for drilling in Atlantic waters west of Shetland is waning, according to Chevron's European director and general manager for exploration Spencer Winter. He blamed the high cost of chartering deep-water rigs and technical problems in starting production from the first oil field for a slow down in activity in the area previously regarded as one of the world's exploration hot spot.

Although he said the Atlantic waters between Shetland and the Faeroe islands were still regarded as an area of interest to oil companies, Winter added: 'the feeding frenzy has dampened a bit."

He made his comments as British Petroleum continued to investigate suspected leaks in an underwater manifold which have caused tbe latest delay in the start of production from the Foinaven field as Britain's first Atlantic oil project.

Winter pointed out that the field had been due on stream last year as a fast-track development but it had not got into production as planned. He said that the soaring cost of the latest heavy-duty rigs - in short supply world-wide as deep-water drilling expands in the Gulf of Mexico - was another factor which had contributed to the slower-than-expected pace of Atlantic exploration.

In addition, some of the older rigs which bad been upgraded for drilling west of Shetland were not able to cope with the water depths, he claimed. He was speaking as Greenpeace activists in inflatables continued their campign against Atlantic exploration by disconnecting position-fixing equipment and attaching oil drums to streamer trailed by a seismic survey vessel which was due to start operations for Conoco in an area 400 mlles from Rockall.

Although Winter did not directly refer to the recent Greenpeace activitles, he said tough environmental conditions, including strong winds and high waves, further added to the difficuities of exploring west of Shetland. He said another reason for the more realistic approach being taken by oil companies was the fact that some wells drilled to date had contained gas which could not be collected at this stage from areas which are remote from the UK pipeline network.

"There is a kind of conventionai wisdom that an area is only as good as the last well that was drilled. Some areas are gassy, some are oily and it is the gassy areas which aren't so interesting," he explained. According to calculations by the energy consultants Wood Mackenzie, Chevron has about 53% of total commercial oil and gas reserves discovered in Atlantic waters to date, mainly due to a share in the Clair oil f9ield for which development plans are being devised in partnership with BP.