After initial doubts, it has now been estimated that fields in the North Sea could hold oil revenues worth over £40 billion to the UK.
Located in the UK waters, the oil fields are thought to hold 1.2 billion barrels of oil and will have a significant role in the industry’s future, following declines in North Sea production levels in 2000.
Low-cost, innovative production systems will be used – the production Buoy and Self-Installing Floating Tower (SIFT) – to overcome the struggle to exploit the smaller hydrocarbon reserves in these marginal fields with high cost conventional production systems. It is hoped that these low-cost systems will achieve significant cost savings, early production delivery and a lucrative way ahead.
The Coalition Government says it is committed to maximising the remaining reserves in the North Sea. So far 41 billion barrels of oil have been discovered and between 12 to 21 billion barrels are thought to still remain, potentially in smaller fields. Low-cost systems will be key to exploiting remaining oil in smaller and remote fields, which tend to be rejected by larger firms because the costs of drilling are too great for the amount of oil they generate.
As oil and gas extraction technologies improve there is potential for further public revenues to be generated.