A leading energy economist has predicted that total field expenditures in the North Sea could amount to £268 billion over the next three decades.
The prospects for total field-related expenditure in the UKCS are outlined by Professor Alex Kemp in a study that he will present at a conference taking place at the University of Aberdeen tomorrow (Wednesday, March 28).
The Future of Energy conference will feature a range of speakers from industry, government and academia, who will gather to discuss the future prospects for the energy industry, from oil and gas and decommissioning to renewables and hydrogen energy.
Among the key findings from Professor Kemp’s study - Prospects for Long Term Activity Levels in the UKCS to 2050 - are that total field expenditures in the period to 2050 could be around £90 billion at today’s prices. Total operating expenditure could be around £124 billion, while total decommissioning expenditure could be around £54 billion.
“Employing investment screening prices of $60 per barrel for oil and 50 pence per therm for gas (both of which are in real terms and thus increase with inflation each year) cumulative production in the period to 2050 could amount to nearly 11 billion barrels of oil equivalent (bn boe),” he added.
While overall production has been increasing since 2014, Professor Kemp’s report predicts that a peak will soon be reached. However, there remains a large amount of unexploited potential that he says will require a concerted effort from industry to realise.
The challenge for the industry and the regulator is to find ways to make these fields viable - new technologies such as those being promoted by the Oil and Gas Technology Centre will have a major role to play in this regard" Professor Alex Kemp
“At 2050 there will still be some modest production activity, and the geographic pattern of activity will change over the period, with oil production in the West of Shetland region becoming increasingly important for both production and investment.
“There remains a large unexploited potential of 5.6bn boe contained in 183 fields in the UKCS, most of which contain less than 20 million boe of potentially recoverable reserves.
“The challenge for the industry and the regulator is to find ways to make these fields viable - new technologies such as those being promoted by the Oil and Gas Technology Centre will have a major role to play in this regard.”
Organised by Dr David Toke, Programme Co-ordinator for the University’s MSc in Energy Politics and Law, the Future of Energy Conference will include presentations from Professor John Paterson from the University’s School of Law on decommissioning, and Rebecca Williams, Policy Manager for the not-for profit renewable energy trade association RenewableUK, who will talk about onshore wind and other priorities.
Other speakers include Adam Ezzamel, the Project Director of the Aberdeen Offshore Windfarm, and Sam Gomersall from Pale Blue Dot Energy, who will talk about Aberdeen’s expansion of hydrogen activities. Meanwhile, delegates will also hear from David Ritchie, Head of Energy Industries in the Scottish Government’s Energy and Climate Directorate.
Commenting ahead of the conference, Dr Toke said: “This Conference examines the future of the old economy, of oil, and its prospects, and also the new one of renewable energy. Aberdeen and the North East of Scotland is well placed to profit from including activities such as wind power, community heating systems, and hydrogen technology.”
*More information about the Future of Energy Conference, including details of how to register attendance, can be found here: https://www.store.abdn.ac.uk/conferences-and-events/conferences-symposia-seminars/school-of-social-science/the-future-of-energy-conference-2018
Author: Robert Turbyne