North Sea oil and gas

Huge quantities of oil and gas waiting to be extracted in North Sea’

Daily news Economy

Billions of barrels of oil and huge amounts of gas could be lying beneath the North Sea, scientists have claimed.

Experts at Aberdeen University who studied the offshore industry’s potential to 2050 says 17 billion barrels of oil and substantial supplies of gas are still to be extracted.

Dr Linda Stephen and Professor Alex Kemp used new data to test if the industry could meet targets set by the Government and the Oil and Gas Authority (OGA).

The North Sea has yielded more than 43 billion barrels of oil since the 1970s but production has been declining in recent years.

Prof Kemp and Dr Stephen applied their data to economic modelling of the sector and say the tough production targets can be met “under favourable conditions’.

These cover investment in the fields, technological developments, the cost of extraction and oil and gas prices.

They say that oil and gas exploration would also have to maintain at least the current levels of successful drilling.

The industry went through a slump between 2014 and 2015 with oil falling as low as $30 a barrel, but prices are back to around $80 a barrel and investors have returned.

This was confirmed when BP announced that it would develop the Alligin and Vorlich fields, with the former due to come on stream within two years.

The study predicts that if conditions are favourable up to £330 billion could be spent extracting oil and gas over the next three decades.

But the authors also warn of “downsides” to the forecasts, including increased costs and not enough investment, that could cut estimated yields by almost 10 per cent.

Prof Kemp ran the economic model using a range of price and cost assumptions, including a barrel of oil at $60 and $70 and a therm of gas at 55p and 60p.

The higher the price, the higher the investment and profit and at $70 for oil 17 billion barrels could be produced over the next 32 years, he says.

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