20 new oil and gas fields needed every year

MORE than 20 new oil and gas fields will have to be developed in British waters each year to help keep pace with the current rate of production, according to an authoritative report on the industry's future.

A new study by Professor Alex Kemp and Linda Stephen of Aberdeen University on the prospects for the UK Continental Shelf (UKCS) until 2035, warns that while remaining reserves are large, the industry's future prosperity will depend on the successful exploitation of large number of small oil and gas fields and enhanced recovery schemes which will be more costly to develop.

The report also claims that Chancellor Gordon Brown's recent hike on the supplementary tax regime could result in a 1 billion reduction in investment in new oil discoveries over the longer term.

Professor Kemp, a leading oil expert with the university's Department of Economics, said that a "striking feature" of the prospects for undeveloped fields was their relatively small size, with the average size of the probable and possible fields estimated at under 15 million barrels of oil equivalent. He said: "The long-term future of the UKCS depends on the successful development of large numbers of small fields and enhanced oil and gas recovery schemes. The remaining reserves are large but they are mostly located in relatively small accumulations."

But he revealed that the study's economic modelling suggested total production, which stood at 3.35 million barrels of oil last year, could reach the industry's target of maintaining production at a level of three million barrels in 2010, perhaps reach two million barrels by 2020 and one million barrels in 2030, despite the dwindling role of production from major North Sea platforms.

Between now and 2030 a cumulative total of 25 billion barrels of oil could be produced, compared with the 35.4 billion already extracted from the UKCS since the first North Sea oil find.

Professor Kemp said: "These figures depend on a high rate of new field development requiring on average over 20 new field developments per year. This is because the average size of new field is likely to be quite small - less than 20 million barrels of oil equivalent."