A new report investigating the contribution of North Sea oil operations to the Scottish economy has found that money is likely to be made until 2060 at the very minimum. Many have welcomed the publication, with officials happy that petroleum extraction will continue to fuel the nation, both literally and financially.
Alex Kemp, the University of Aberdeen’s professor of petroleum economics, revealed the latest findings, saying: “Oil and Gas UK say there is the 15-24 billion barrels oil equivalent, but nobody knows with any certainty how much more is actually left. My view is that the reserves will last beyond 2060.” Professor Kemp's comments are in complete opposition to those revealed last month by the Wood Group’s Sir Ian Wood. Sir Ian said he thought there were only 15 years left of reserves, after which time the economy would start to feel the downturn in production.
It seems there are many who believe Sir Ian’s words to be incorrect, one being Professor Kemp. The university professor believes that gas and oil reserves located off Scotland’s north coast have been underestimated on an ongoing basis, though he was quick to point out that he did not think these low estimations had been made deliberately. Professor Kemp explained that estimates made when oil was first found in the 1970s could have been wrong due to the simplistic technology and knowledge base utilised at that time; for example, west of the Shetland Islands is the Clair field. When first discovered in 1977, many realised it was totally uneconomic; however, as technology modernised and horizontal drilling was developed, operations have successfully started. Clair is now the largest field in Britain and produces oil worth $100 a barrel.
In the past, the industry has not been fast at developing schemes to enhance oil recovery, meaning that many difficult fields have not fully been exploited.
“The industry has been slow to introduce enhanced oil recovery schemes, on the grounds that off-shore it was too expensive to do things that could be done on-shore in the US, for example. But now this is getting underway in a few fields and my own view is that we will see more of this. That could see worthwhile increase in the reserves that are viable,” Professor Kemp continued.
The professor’s views have been welcomed, particularly by Fergus Ewing, the spokesperson for the Scottish National party. Mr Ewing pointed out that Professor Kemp is a leading oil economist and, as such, he warmly welcomes the extended prediction of North Sea oil production until 2060.
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