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Page added on February 24, 2014

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North Sea oil: Facts and figures

Geology

 

40bn barrels extracted

24bn could remain

  • 30-40 years of production remaining
  • £57bn tax revenue predicted by Scottish Government by 2018
  • 38% fall in oil revenue predicted by Office for Budget Responsibility by 2017-18

The future of North Sea oil is one of the key campaign battlegrounds ahead of the Scottish independence referendum.

Since the first licences were issued for the extraction of oil and gas from the North Sea in 1964, about 42 billion barrels of oil have been produced. It is estimated there could be up to 24 billion more in untapped reserves.

The industry employs 450,000 people across the UK and in 2012-13 the industry paid £6.5 billion in taxes to the UK government.

Chart showing oil and gas revenue since 1969

North Sea oil supplied 67% of the UK’s oil demand in 2012 and 53% of the country’s gas requirements and is a major boost to the country’s economy.

If oil revenues are included in GDP figures, Scotland is shown to generate more per head of population than the UK as a whole.

UK and Scotland GDP compared. If oil revenues are included in GDP figures, Scotland is shown to generate more per head of population than the UK as a whole. For Scotland, it is £26,424 per head compared with £22,336 per head for the UK.

Since a peak in 1999, production has steadily declined.

Maintenance work on ageing infrastructure and a spate of helicopter accidents have caused temporary halts to production in recent years.

A greater focus on health and safety following the Gulf of Mexico disaster in 2010 has also had an impact, as has an increase in taxation on North Sea production introduced in March 2011.

Chart showing oil and gas production since 1970

In 2013 the UK government commissioned Sir Ian Wood to carry out a review of the industry.

His final report, released on 24 February 2014, makes a series of recommendations, including the setting up of a new independent regulator.

He also recommends more investment in infrastructure to improve efficiency, and more money to be spent on exploration and exploitation of untapped reserves.

This would put the UK in a much stronger position to exploit the estimated 24 billion barrels of oil remaining, the report says.

Prime Minister David Cameron believes the UK, with Scotland remaining part of the Union, would be best placed to fund future exploration and exploit the increasingly hard-to-reach oil and gas resources.

He also said a united UK would be better able to cope with fluctuations in oil prices.

Chart showing oil and gas price since 2000

But Scottish First Minister Alex Salmond insists an independent Scotland could withstand the volatility of the oil market.

He wants to set up a Norwegian-style sovereign wealth fund – setting aside a tenth of oil and gas revenue each year – to help offset some of the problems caused by the price fluctuations.

The Norwegian fund – or Government Pension Fund Global – was worth an estimated $785 billion (£471 bn) in September 2013, and is one of the largest in the world.

It was set up in 1990, initially to help cope with the rising costs of pensions for a population that was living longer, and also accommodate changes in oil prices.

BBC



6 Comments on "North Sea oil: Facts and figures"

  1. mike on Mon, 24th Feb 2014 11:42 pm 

    ” 24 billion barrels of oil equivalent”

    Reposting this response to this load of old bollocks.

    Production in North Sea is declining, the most easily reached oil has been got out. All that is left soon will be the tough stuff, only worth getting if oil prices go up. The North Sea is near being worked out, but both the UK government, and the Scottish government are hyping this supposedly fabulous wealth that is there for the taking, each ro thie own misguided reasons. Cameron, because he can say that only a UK (“sixth largest economy in the world”)that includes Scotland has the financial clout to ensure the continued development of the “vast” wealth, and Salmond because he can say an independent Scotland can be financed by the exploitation of this oil wealth. They are both either knaves or fools. 24 Billion barrels of oil equivalent maybe (Much of it presumably gas down in the English sector of the N Sean, not the Scottish sector) but flowing out into the refineries and tanks on land at such a slow rate that it will generate piddling amounts of wealth per year. Not enough to restore the UK to oil independence, and not enough to provide the income to a high spending independent Scotland.

  2. DC on Tue, 25th Feb 2014 12:25 am 

    So, if it took only ~ 20 years +/- for the UK to extract-not produce, 40 billion barrels, and 24 are ‘left’, how long are those remaining 24 expected to carry the UK? Even allowing for the fact that the last 24 will be slower and more expensive to extract than the first 40 were, just what do those people expect to do after the remaining 24 are gone? To they hope to find another 65 billion or so just up the coast?, is there an(undiscovered) North-North Sea oil field just waiting to carry Britain for another 40 years?

    Britain was amazingly wasteful-yet ‘efficient’ at burning though the first 40bn, yet for all the ‘wealth’ jobs whatever that ‘created’,current day Britain is a basket-case. Over-populated, out-sourced industry, a financialized(read fraud-based) economy, Politically, and definitely economically, Britain is in bad shape. 24bn barrels of marginal oil left do not sound like the UK has much, if anything future to me no matter how ‘efficient’ the UK becomes. If anything, greater ‘efficiency’, which really means monetary efficiency, just means whats left is gone even sooner. Even in a declining economy, I have great faith in the UKs ability to waste whatever is put in front of them to burn.

  3. Plantagenet on Tue, 25th Feb 2014 1:04 am 

    Good luck to the Scots. Copying the Norwegians who copied Alaska’s sovereign weath fund and saving a hunk of the oil revenue is a great idea. It beats letting the Brits steal all of Scotland’s oil wealth.

  4. Lucky Luck on Tue, 25th Feb 2014 11:12 am 

    Cameron’s big game changers for the British Empire in which the Sun never happen to set. Shale gas and some lumps of oil on the sea floor? Of course in his neoliberal dreams those fossils will certainly help revive the British Empire again. The southern UK by the way is one big swimming pool probably due to fossil climate change. The rest of the world will silently smile and gradually take another road.

  5. Davy, Hermann, MO on Tue, 25th Feb 2014 11:35 am 

    The UK, London and New York, Wall Street are the centers of the TBTF global financial organizations. The core of the market manipulating conspiracies, corruption from the political/financial partnership, de facto legalized criminality and wealth transfer policies are located here. Theses corrupt conditions are worldwide but these two locations are the heart of what is in my mind the evil axis. I say evil only because this new normal system contains the dry evil elements of a thoroughly nasty enterprise. Instead of SS storm troopers we have clean cute white collar thugs. It is these command and control systems in London and New York that will prevent effective mitigating and adaptation actions that could save a significant portion of the global population with pre-contraction actions. It is this axis of the nasty that will gut our social fabric and infrastructural fabric in an orgy of greed and manipulation. This relates to London because of its huge reliance on global financial trade. The UK’s growth has centered on London financial center. Without this growth and unnatural wealth generator the UK will descend into significant contraction. The UK is being buffeted by climate instability, over population, and social decay. Nothing that is not typical elsewhere but in the UK the reliance on one city and the shaky global finance industry is the greatest. London will see unprecedented contraction issues if the global financial system falls. The whole global system will be rocked but London will fall the farthest

  6. Northwest Resident on Tue, 25th Feb 2014 6:00 pm 

    Davy — Unfortunately you are correct about my genetic homeland — the U.K. The UK’s greatest financial industry has always been empire building — war, subduing native populations, extracting resources with the help of slave labor from distant lands, laying claim to vast expanses of global properties and building and army and a navy to hold on to the plundered possessions. It is all about to unravel, and when it does, UK will be stuck with what they have on their small group of islands in the cold foggy north, and that isn’t much.

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