BP announced that it joined Chevron, ConocoPhillips and Shell in a decision to move forward with plans for a third phase of operations at the Clair oil field.
"This is a major milestone and a further big commitment to the west of Shetland by BP and its co-venturers," BP Regional President Trevor Garlick said in a statement.
The British government said reserves in the region may be as much as 17 percent of the country's total oil and natural gas potential.
Phase 1 development has produced 90 million barrels of oil since operations began in 2005. Phase 2 is expected to produce reach peak production capacity of 120,000 barrels of oil per day after operations begin in 2016.
"Total hydrocarbons initially in place across the entire field are estimated at around 8 billion barrels of oil equivalent, although due to the highly complex and fractured nature of the reservoir, there has been considerable uncertainty as to how much of the oil can be recovered," BP said.
Clair field was discovered in 1977.