Following a recent report by the Oil and Gas Authority (OGA) in which 3 billion boe has been mapped to remain in unsanctioned UKCS discoveries, in an interview with Energy Voice oil and gas economics expert, Professor Alex Kemp from the University of Aberdeen, stated that many of these small pools can be economic at current oil prices, conditional on a reduction in costs through recent advances in technology including unmanned platforms.
The October report by the OGA mapped out 350 unsanctioned discoveries across the UK North Sea, many of which were made of finds that held reservoirs estimated to hold less than 50 million barrels of oil and gas each.
“At $50 per barrel most of these very small ones would not be viable – we need $60 or $70,” he said, "But if we get these technological advances confirmed we could get a number of these going ahead.” Professor Kemp also highlighted that the UK’s current tax regime remained a “burden” to companies exploiting small pools.
Workers unions are taking action to maximise economic recovery of UKCS oil and gas, calling for governments at Westminster and Holyrood to invest in new infrastructure. Unite Scottish secretary Pat Rafferty said: “Scotland’s oil and gas industry is going through a crisis. The number of jobs lost as a result of the downturn in the UK oil and gas sector could be above 120,000 by the end of 2016. Companies should be encouraged to use their existing rigs and pipelines to recover pools wherever that’s possible.”
“However a number of these small pools lie further away and will need new stand-alone solutions. Our governments could use their borrowing powers to take out public stakes in new offshore infrastructure. That would encourage companies to also invest, would support jobs, and would create returns for the public purse as the oil and gas from these pools begins to flow," Rafferty continued.
“Today we are repeating our call for an urgent summit, bringing together the UK and Scottish Governments, the trade unions and industry, to look at this idea and create a strategy for the future.”
Professor Alex Kemp is currently Professor of Petroleum Economics and Director of Aberdeen Centre for Research in Energy Economics and Finance (ACREEF) at the University of Aberdeen. For many years he has specialised research in petroleum economics with special reference to licensing and taxation issues and has published over 200 papers and books in this field.