Estimates of the amount of oil left in the North Sea have risen sharply and the rate of decline in oil and gas production is expected to slow dramatically over the next few years, a survey by Oil & Gas UK has found.
The trade body’s annual activity report found that North Sea reserves in known oil and gas fields have risen to 11.6 billion barrels of oil equivalent (boe), up by 1.3 billion boe on last year’s survey. Estimates of as-yet-undiscovered fields bring total probable reserves up to 24 billion boe, about two thirds of the amount extracted in the past four decades since oil was discovered in British waters.
The survey also predicted increased investment this year by oil firms, up from £6 billion last year to £8 billion, which could create an extra 10,000 to 15,000 industry jobs, 45 per cent of them probably in Scotland.
But it gave warning that public confidence needed to be restored following the BP disaster in the Gulf of Mexico, particularly as much of the new development was expected to be in deep waters west of Shetland.
“For the first time in five years, investment increased substantially in 2010 to £6 billion,” Malcolm Webb, chief executive of Oil & Gas UK, said. He added that the anticipated investment next year would be about 60 per cent higher than in 2009, when oil prices were low.
Much of the increased activity is being driven by smaller independent oil companies, which are gradually taking over the North Sea’s remaining prospects as the big oil majors sell what remains of their fields to concentrate on bigger finds elsewhere in the world.
But this meant more activity rather than less. “The plans currently tabled by companies to bring oil and gas discoveries into production over the next five years suggest potential of up to £40 billion of investment, 20 per cent higher than what was anticipated in last year’s survey,” said Mr Webb.
