North Sea oil’s ebbing tide

According to the pessimists, the rigs off Britain’s coast could cease pumping in a decade’s time. But, as Tim Webb warns, the oil giants could depart leaving 9 billion barrels under the sea bed – because the economics of residual fields simply don’t add up

The sight of a convoy of giant tankers last week carrying emergency petrol supplies to the UK is a glimpse into the future. Last weekend’s strike at the Ineos refinery at Grangemouth, which helped push up oil prices to a new record of $120 a barrel, reminded us how dependent we have become on North Sea oil – and how we will have to cope in the not-too-distant future when it’s all gone.


When the refinery closed, BP also had to shut down the Forties pipeline that supplies it with oil. This pipeline carries about 700,000 barrels of oil – or almost half of the UK’s daily production – from the North Sea. The strike has ended but oil production from the North Sea, which now barely meets UK demand, is declining much more quickly than predicted.

By 2020, oil and gas production could be one-sixth of today’s level, according to the most pessimistic forecasts – enough to meet only 8 per cent of UK demand. Despite the soaring oil price, companies are drilling fewer exploration wells in the North Sea and investment levels have also started to fall.

Malcolm Webb, chief executive of the trade association Oil & Gas UK, warns that unless these trends are reversed, some nine billion barrels of oil and gas – about nine years’ worth of production at today’s levels – could be left at the bottom of the sea forever. This would cost the cash-strapped Treasury billions in lost tax revenue – and more importantly would hasten Britain’s total dependence on countries such as Russia and the Opec members for its oil and gas.

Guardian