Inside Track Special report


North Sea’s bright future


George Thomson Feature Writer


Enhanced recovery is breathing new life into the UK continental shelf


As the petrochemical wealth under the


North Sea becomes tougher to exploit, the bigger oil firms are abandoning it for blockbuster fields elsewhere. In recent years, a spate of massive oil finds


have left the planet’s largest energy companies giddy at the thought of new production


32 Holyrood 13 June 2011


bonanzas. As attention turned to emerging regions such as Brazil, Russia and West Africa, the common consensus was that the North Sea’s best days had gone. In many cases such pessimism has been


well-founded. Te UK’s oil production has been declining steadily since 1999, when output peaked at around 4.5 million barrels a day. With the prospect of company-changing discoveries elsewhere, and a dearth of major finds in the UK continental shelf (UKCS), major oil producers began to regard revenues derived from the North Sea, a relatively well known commercial and fiscal environment, as a crutch which enables the funding exploration elsewhere. According to David Bamford, director at


Finding Petroleum: “Many big companies and the UK Government have a similar


attitude to the North Sea. Tey regard it as a cash cow. It’s a place they can take money out of and, in both cases – big companies and the UK Government – spend it elsewhere. Tey are aligned in regarding it as a cash cow, and what that tells you is our inheritance from the previous government is a complete lack of an oil policy.” Te production slump was matched by a


fall in investment. In 2008, Malcolm Webb, chief executive of the trade association Oil & Gas UK, said there was a risk that billions of barrels worth of oil could be abandoned at the bottom of the sea, warning: “Current investor behaviour will materially affect whether all those extra barrels are recovered … unless there is a steady flow of new projects to make use of the existing infrastructure then companies will have to start decommissioning it.”


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