Drilling has begun at the North Sea Lybster field on the Caithness Shoreline.
Caithness Petroleum are using special tools to bore a curved well from land under the seabed which could reach the field in two months.
Rising oil prices has made drilling from a land base cheaper, easier and safer the company said.
According to the BBC the North Sea has almost as much oil left as has already been extracted, with experts stating between 25 and 30 billion barrels could be recovered over the next 40 years.
Caithness Petroleum's chief operating officer Peter O'Sullivan said Lybster could be the first of a number of onshore wells in the area.
He said: "We think the field is in the region of 3-4 million barrels and we would like to start producing around a thousand barrels a day.
"But for an onshore development, this can be economic to a few hundred barrels a day."
It is hoped the Lybster venture could have a lifespan of 15 to 20 years.
(GK/JM)
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