THERE is “no way” that energy firms will be able to extract 20 billion barrels of oil from the North Sea while exploration rates remain at a record low, MPs have been told.

Oil tycoon Sir Ian Wood said there needed to be “some serious exploration done” to extract the maximum 20 billion barrels that could remain underground.

He spoke out after Deirdre Michie, chief executive of industry body Oil and Gas UK, told the Scottish Affairs Committee that drilling in the North Sea had hit an all-time low.

The Oil and Gas Authority (OGA) estimated there are the equivalent of between 10 and 20 billion barrels of oil remaining off the shore of the UK. With some 44 billion barrels already removed, she said that meant “you could say there is another third of activity still to go after”.

But Wood, who previously carried out a review for the UK Government into how to maximise recovery, said: “There’s no way we’re going to get close to 20 billion barrels unless there is some serious exploration done.”

He told the committee, which is carrying out an inquiry into the future of the oil and gas sector: “Disappointingly we’re still looking at 11.7 billion barrels, that’s the latest figure.

“That’s way short of the 20 billion barrels we hoped might come.”

Michie said the key challenge facing the industry was “that our drilling activity continues to be at an all-time low”.

In the past four years improved efficiency in the North Sea has led to an “extraordinary” 16% increase in production, she said.

Michie added: “The concern is with the low levels of exploration as we look past 2020 we will start to see production falling away.”

She insisted there was a “long-term and sustainable future” for the sector.

Michie told the committee: “The OGA estimates there is between 10 to 20 billion barrels of oil equivalent still out there, and when you compare that with where we have come from, we have taken out 44 billion barrels to date, so you could say there is another third of activity still to go after.”

Consequently Oil and Gas UK is “looking to extend the productive life of the basin well into the 2030s and beyond,” she said.

“We consider there is a long-term and sustainable future for this industry if all things come together and we continue to work in the way we have been working.”