A Scottish oil rig yard has lost out on a multi-million pound contract to build a jacket for BP Amoco's Clair Field in the North Sea.

The future of the KBR Caledonia yard at Nigg may now be in doubt after it pinned hopes for its survival on winning the �60m order.

The work will go to Norway and Aker Verdal, while some the topside work will be carried out by UK-based Amec.

Earlier this year, the same Norwegian yard beat the Cromarty Firth operation to the Goldeneye contract for Shell, apparently undercutting it by millions.

The Clair field lies in deep water off Shetland

The Highland yard completed its last major contract two years ago and has effectively been operating on a care and maintenance basis since then.

BP said all the Clair tenders had been submitted to a rigorous evaluation and that the competence of each company over a range of disciplines and work practices had been assessed.

The Clair Field was given the go-ahead by the UK Government towards the end of last year with the hope of creating up to 1,000 jobs.

It is the largest undeveloped oil and gas field on the UK continental shelf in the North Sea and lies 45 miles west of the Shetland Isles.

Technical advances

The Clair field was discovered 24 years ago and is thought to have deposits of up to six billion barrels of oil.

It lies in up to 150 metres of water and for years was regarded as being too expensive to develop.

However, recent technological advancements mean it is now seen as viable by BP, which will work with partners ChevronTexaco, Conoco, Amerada Hess and Enterprise Oil.