The Department of Energy & Climate Change (Decc) has revised down its estimates for the amount of oil and gas there is left to recover in the North Sea by between 1billion to 3billion barrels.
The new government figures claim that there are between 11.1billion to 21billion barrels of oil equivalent of UK oil and gas reserves.
The department’s updated figures this week came just days after a report commissioned by the Scottish Government claimed that there remained up to 24 billion barrels of oil equivalent remaining offshore.
The report, led by Melfort Campbell, called for an overhaul of the fiscal and regulatory regime in order to ensure recovery was “maximised” to the full 24billion barrels.
The earlier Wood Review, which was commissioned by the UK government, also estimated there are between 12billion to 24billion barrels – figures which were based using Decc’s own calculations last year.
Trade body Oil and Gas UK (O&GUK) also agree there is as much as 24billion barrels of oil to recover – which represents a “mid-case” estimate comprising proven and potential reserves, as well as possible discoveries.
Professor Alex Kemp, a member of the Independent Expert Commission on Oil and Gas which undertook the Scottish study, explained that Decc was taking a “more cautious view of ‘yet-to-find’ prospects” due to recent low levels of exploration.
He said that last year Decc had estimated yet-to-find reserves of around 9.4billion barrels, while this year they estimated 6.1billion.
“That is where the major change is,” he said.
Mike Tholen, Economics Director for O&G UK said Decc’s figures last year for its “medium-case” was 22.1billion, compared to 21 billion this year, a drop of 1billion.
He said: “I suspect optimism has been depressed by recent poor performance – our production has been poor, as well as the exploration side of things.
“They have got more nervous on the long term output because of that.”
A Decc spokesman insisted the department’s figures were “consistent” and that the prior year’s figures were “similar to last year’s once production during 2013 is taken into account”.
Professor Kemp said 24billion barrels remained a valid estimate as long was changes proposed by both reports by Mr Campbell and Sir Ian Wood came into play.
He said: “We are hoping that with the Wood Review proposals and with further tax reliefs that the exploration effort will be enhanced.”
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