UP to £330 billion could be spent on oil and gas extraction in the UK Continental Shelf over the next 32 years, according to a new study.
Professor Alex Kemp and Linda Stephen from the University of Aberdeen used financial simulation modelling to assess key exploration and development risks.
The study indicated the “ambitious” targets set out by the Oil and Gas Authority are achievable in the context of recent oil and gas prices, and the cost reductions and productivity increases effected over the past few years being maintained.
READ MORE: Climate campaigners hit out at BP's new North Sea oil field development
In one model, using $60 US per barrel and 55p per therm of gas, the study found 14.8bn barrels of oil equivalent (bn boe) could be produced between 2018 and 2050.
Under this scenario development expenditures could accumulate to £124bn by 2050 at today’s prices while operating expenditures could accumulate to £147 billion by 2050 and decommissioning expenditures to £53bn.
However the study paper stated: “It should be stressed that there are significant downside risks relating to this finding. In particular the achievement of 14.8 bn boe depends substantially on the development of 421 new fields of which no less than 295 are in the category of technical reserves.
“The development of these fields is by no means certain even though they pass the stipulated investment hurdle. They are not yet at the planning stage. For the nearer term in particular much depends on the ability of investors to take advantage of the current physical capacity of the supply chain to proceed with projects.”
When a price level of $70 and 60p in real terms was used for modelling, long-term activity was found to be significantly higher.
Under this scenario more than 17bn barrels could be recovered by 2050.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel