According to the company, the drilling work, which began two months ahead of schedule, is being undertaken by the drilling rig Ocean Nomad, leased from Diamond Offshore, in the Northern North Sea.

Two discovered oil fields, Harris and Barra, located 160km east of the Shetlands and 12km west of the Tern field will be exploited by the Western Isles project.

Once operational in 2015, the nine-well development is expected to produce more than 40,000 barrels of oil equivalent, adding more than 30,000 barrels (net) to the company’s daily production.

Dana UK managing director Paul Griffin said beginning drilling is another key milestone for the Western Isles Project and the company.

"Western Isles is a key project for our future growth ambitions as we aim to significantly grow our production," Griffin added.

The Western Isles Project involves a subsea development of at least five production and four water injection wells as well as two exploration wells that are tied back to a new build floating production, storage and offloading vessel (FPSO) with oil export using shuttle tankers.

Drilling has commenced with subsea installation in summer 2014 and FPSO installation expected in summer 2015.