The Faeroe–Shetland Basin is part of a passive continental margin that formed as a result of multiphase extension associated with North Atlantic rifting during the Mesozoic and Paleocene. Breakup was followed by postrift subsidence during the latest Paleocene to late Eocene and the development of at least three 70–150-km (43–93-mi)-long, broadly north-south–orientated, slope canyons and linked terminal fans during the middle Eocene. The terminal fans filled northeast-southwest–striking basin-floor bathymetric depressions that had formed above the hanging walls of underlying, dormant northeast-southwest–trending Mesozoic extensional faults and adjacent half-graben depocenters. Compression during the middle and late Miocene caused contractional reactivation of the Mesozoic extensional faults and folding of the overlying uppermost Paleocene to middle Miocene postrift sediments into a series of 17 northeast-southwest–striking anticlinal domes. The switch from hanging-wall bathymetric depression during terminal fan deposition to anticlinal domal high during and after the middle to late Miocene compression has led to the present-day spatial coincidence of a potential hydrocarbon reservoir and an effective trap. The anticlines also acted as the foci for gas migration during or after compression (15 Ma to present). However, the timing of compression and differential uplift of the basin margins during the past 15 m.y., approximately 45 m.y. after the main phase of oil migration, may be a critical negative factor for oil exploration in this part of the basin. This hydrocarbon phase may have spilled during the structural reorganization, either updip into shallower traps or out of the hydrocarbon system via seeps.