Fish may have been Donegal's "oil" for the past two decades, but a consultancy study has suggested that Killybegs could also become a landing point for mineral exploration off the Atlantic seaboard.

The Coopers and Lybrand study, which examines options for a multi-million-pound development of the fishery harbour, suggests that Killybegs might be considered for cargo business by oil companies engaged in exploring deep waters west of the Porcupine Bank. However, given the competition from Foynes, the Donegal port would need a new pier at least.

The study, which Mr Joey Murrin of the KFO has called on the Minister for the Marine and Natural Resources to implement, examines several options for development, and says a minimum investment of £1.3 million is required if the harbour is to function safely. Even with this basic investment, the harbour is likely to lose business if one of two options it proposes is not acted upon.

The consultants propose construction of a new 150metre-pier and 120-metre wharf and dredging at a cost of up to £10 million, while it estimates outer harbour development, which would include an additional 400 metres of deepwater berthage, at £17 million. The KFO has threatened to withhold harbour dues of around £500,000 annually if the Minister does not move - and Dr Woods has responded that he is examining the study "seriously".

As the report says, some of the larger vessels regularly hit bottom due to siltation. The port is under severe pressure with 23,591 gross registered tonnage to accommodate, including 22 pelagic vessels and four whitefish vessels of more than 30 metres in length - the longest being the Veronica at 97 metres, closely followed by the Western Endeavour and Atlantic Challenge.