Oil to dominate 'for decades more'

Feb 21 2012

The economy will be petroleum-driven for decades to come, with higher returns than previously estimated, an oil and gas conference has been told.

Industry leaders, as well as First Minister Alex Salmond, described the resources still to be extracted from the North Sea.

About 24 billion barrels could still be taken from the seabed, with more than half the financial value still to come, the conference in Edinburgh heard.

Mr Salmond, who gave the keynote address, put the potential wholesale value at a trillion pounds.

Representatives of major organisations, including Shell and BP, were gathered 40 years since coming together in Aviemore to discuss the opportunities from offshore discoveries.

Looking to the next 40 years, the conference heard optimistic projections for oil and gas extraction, revenue and industry lifespan. Malcolm Webb, chief executive of industry body Oil and Gas UK, said: "Call me a wide-eyed optimist if you like but I remain of the view that (prospects) will be, and indeed must be, good. And in my view good for another 50 years or more."

Outlining his reasons for optimism, he added: "This country will remain a petroleum-driven economy for decades yet to come. That is not an anti-renewables statement, it's simply a statement of practical truth and one which, as I think increasingly dawns as such, will in itself drive the imperative that during the transition to a lower-carbon economy we simply must maximise the recovery of our indigenous oil and gas resources, or indeed we risk not making the transition.

"Secondly, on the question of the size of the remaining resource, I personally suspect it will eventually be shown to be even more than the 24 billion barrels that we currently estimate.

"I have no practical evidence for that assertion, just the reflection that one of the constants throughout the life of the UK offshore so far has been that the experts have been consistently underestimating its subsequently proven reserves."

Finally, he stressed the importance of the industry to balancing the economy. "Here is an industry that not only pays its way without a penny of subsidy but on top of that supports the balance of trade while producing significant tax. In today's straitened times, these are facts that have strong relevance."