The North Sea oil industry has been in transition for some years following the collapse of oil prices in late 2014. Large cost reductions have been painfully achieved. Production has increased due to a combination of new fields coming on stream plus a substantial increase in production efficiency to around 75%. But new field investment expenditure has fallen dramatically since 2015 and exploration remains at a relatively low level reflecting principally the maturity of the province as well as oil and gas prices far below their pre-2015 levels.
It was the beginning of an exciting week when Greenpeace announced they had sent activists to the middle of the North Sea to climb the remains of Shell’s Brent platforms, brandishing signs of “clean up your mess”.
Petro-economist Alex Kemp has issued a challenge to industry to help recover the 5.6 billion barrels of North Sea oil which could be “left in the ground” under current estimates.
The purpose of the new research paper by Linda Stephen and myself is to throw light on the implications of “lower for longer oil prices” on long term activity in the UKCS to 2050. The oil price scenarios employed are $50 and $60 in real terms. For the year 2050 these translate into $96.1 and $115.3 in money-of-the day terms. The price scenarios are not forecasts.
A new Aberdeen University study suggests the UK North Sea can deliver nearly 11billion more barrels of oil equivalent (boe) at “lower for longer” prices.
More re-engineering of the UKCS fiscal regime may be necessary before a possibly significant slice of known and potential oil & gas resources in the North Sea can be pursued and developed, according to new research.
North Sea Alex Kemp used a celebration of his 50 years with Aberdeen University to remind guests there was still a major oil and gas bounty to plunder in UK waters.
The return of plus $50 crude after a seven month absence will not be enough to spark a wave of new North Sea development wells, a top oil industry economist said yesterday.
Benchmark Brent crude rose 1% to $50.22 at one point yesterday, its highest level since early November.
The price has rallied from a 13-year-low of about $28, which was reached in January, but is still well below the summer 2014 high of more than $110.
Oil experts from industry and academia will debate the obstacles to extracting the North Sea’s remaining reserves at a conference in Aberdeen this week.
The list of speakers includes top petroleum economist Professor Alex Kemp, Shell’s UK director for upstream, Paul Goodfellow and Amec Foster Wheeler’s group president for northern Europe and Commonwealth of Independent States, John Pearson.
The event, organised by Aberdeen University, will take place at the King’s Conference Centre on Thursday.
As an economist, I find the Scottish Greens' suggestion that we could shut down the North Sea oil industry and move to industries such as sustainable forestry rather misguided.
Oil expert Professor Alex Kemp has said there is some cause for optimism that the oil price may rally in 2017, but not before it endured a "painful" 2016.
