A leading oil economist has predicted that total field expenditures in the North Sea could amount to £268 billion over the next three decades.
The prospects for the oil and gas sector are outlined by Professor Alex Kemp in a study that he will present at Aberdeen University today.
Among the key findings from Professor Kemp’s study – Prospects for Long Term Activity Levels in the UKCS to 2050 – are that total field expenditures in the period to 2050 could be around £90 billion at today’s prices.
Total operating expenditure could be around £124 billion, while total decommissioning expenditure could be around £54 billion.
He said: “Employing investment screening prices of $60 per barrel for oil and 50 pence per therm for gas (both of which are in real terms and thus increase with inflation each year) cumulative production in the period to 2050 could amount to nearly 11 billion barrels of oil equivalent (bn boe).”
While overall production has been increasing since 2014, Professor Kemp’s report predicts that a peak will soon be reached. However, there remains a large amount of unexploited potential that he says will require a concerted effort from industry to realise.
He added: “At 2050 there will still be some modest production activity, and the geographic pattern of activity will change over the period, with oil production in the West of Shetland region becoming increasingly important for both production and investment.
“There remains a large unexploited potential of 5.6bn boe contained in 183 fields in the UKCS, most of which contain less than 20 million boe of potentially recoverable reserves.
“The challenge for the industry and the regulator is to find ways to make these fields viable – new technologies such as those being promoted by the Oil and Gas Technology Centre will have a major role to play in this regard.”
28 Mar 2018