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UK Out of Oil & Gas Within 10 Years

General discussions of the systemic, societal and civilisational effects of depletion.

UK Out of Oil & Gas Within 10 Years

Unread postby vox_mundi » Tue 19 Sep 2017, 17:54:56

UK Oil and Gas Reserves May Last Only a Decade

The Scottish and UK oil industries are entering their final decade of production, research suggests.

A study of output from offshore fields estimates that close to 10 per cent of the UK’s original recoverable oil and gas remains – about 11 per cent of oil and nine per cent of gas resources.

The analysis also finds that fracking will be barely economically feasible in the UK, especially in Scotland, because of a lack of sites with suitable geology.

If the study’s predictions are correct, the UK will soon have to import all the oil and gas it needs, researchers warn.

Instead, they recommend a move towards greater use of renewable energy sources, particularly offshore wind and advanced solar energy technologies.
The UK urgently needs a bold energy transition plan, instead of trusting to dwindling fossil fuel reserves and possible fracking. We must act now and drive the necessary shift to a clean economy with integration between energy systems. There needs to be greater emphasis on renewables, energy storage and improved insulation and energy efficiencies.

It is strongly urged that the UK Government’s ongoing energy cost report – the high-profile Helm Review – should take stock of the projected shortfall in resource availability and how this might be addressed.

Scientists from the University of Edinburgh examined the UK’s likely potential for fracking and carried out a fresh analysis of the country’s oil and gas production.

Their findings take into account the long-term downward trends of oil and gas field size and lifespan, alongside the break-even costs for fracking.

They found that the UK has only minimal potential for fracking.

Many possible sites are in densely populated areas, have low quality source rocks and complex geological histories.


Fracking is likely to be too restricted to become an effective industry, which would require thousands of wells, scientists say.

Analysis of hydrocarbon reserves shows that discoveries have consistently lagged behind output since the point of peak oil recovery in the late 1990s.

The research predicts that both oil and gas reserves will run out within a decade.

The study, in The Edinburgh Geologist, is published by the Edinburgh Geological Society.
http://edinburghgeolsoc.org/eg_pdfs/edi ... ist-62.pdf pp 18-25
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Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby Tanada » Tue 19 Sep 2017, 22:03:21

IOW a return to the situation as it existed 50 years ago before North Sea fields were discovered. Doesn't anyone remember the 1960's when the UK/Denmark/Norway/Holland were all international oil importers because their domestic sources were between small and non-existent?

The North Sea gave the major claimants a huge economic boost just as the 20 year recovery cycle after World War II was abating. In a way it is too bad the Brent deposit wasn't discovered in 1947 instead of twenty years later. Royal Dutch Shell was in the process of losing all of its Indonesian oil resources just as the North Sea was proven viable.

Be that as it may, so Western Europe is returning to be a major oil importing region. This process has been underway for over 15 years at this point with the North Sea peaking out in 2001-2002? The crucial difference between the North Sea and say Romania is off shore platforms have to maintain a certain high flow rate to pay the associated costs. The fields in Romania are old and abused, but they are still pumping out a trickle of oil even today after about 100 years of production. the North Sea field has been progressively scrapping oil platforms as sections play out because the cost of keeping a platform operational out weighed the value of the oil being produced. This is going to leave a lot of OOIP behind, permanently stranded in those formations.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby vtsnowedin » Wed 20 Sep 2017, 19:12:17

From a far off point of view it is sad that once the North sea fields were discovered and their extent and reserves well established that the countries having claim to the oil and gas chose to sell it cheaply into the current market instead of holding it in reserve for future years and only producing each year what was needed by the home countries.
It amounts to killing the goose that lays golden eggs.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby rockdoc123 » Wed 20 Sep 2017, 20:04:46

From a far off point of view it is sad that once the North sea fields were discovered and their extent and reserves well established that the countries having claim to the oil and gas chose to sell it cheaply into the current market instead of holding it in reserve for future years and only producing each year what was needed by the home countries.
It amounts to killing the goose that lays golden eggs.


Time value of money argues against that view. Once you have sunk all the costs to find reserves the longer you wait to produce it the less that net present value.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby vtsnowedin » Wed 20 Sep 2017, 21:12:34

rockdoc123 wrote:
From a far off point of view it is sad that once the North sea fields were discovered and their extent and reserves well established that the countries having claim to the oil and gas chose to sell it cheaply into the current market instead of holding it in reserve for future years and only producing each year what was needed by the home countries.
It amounts to killing the goose that lays golden eggs.


Time value of money argues against that view. Once you have sunk all the costs to find reserves the longer you wait to produce it the less that net present value.
I think they recovered their finders fee fast enough. I'm not sure if they could have slowed the pace of drill out and production but can't see why they could not. Just because you can get it done this year for $25 a barrel dose not mean that it would not be better to leave it for ten years or more and sell it for $75 per barrel. Of course an oil company CEO cant see beyond the next quarterly report and the bonus it might get him but that doesn't mean it is the best plan for the UK.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby rockdoc123 » Wed 20 Sep 2017, 22:31:02

Just because you can get it done this year for $25 a barrel dose not mean that it would not be better to leave it for ten years or more and sell it for $75 per barrel.


Having been involved in this business for decades and at the decision-making level, I can tell you that the decisions to develop are not taken lightly. Most of the companies are public and report to the shareholders. The decisions that are made are in their best interests, not to fill the pockets of a few executive who normally don't own a large proportion of shares. At any given point when you make the decision to develop or not, it is based on an educated view of future prices. I was actually involved in some North Sea acquisitions back when oil was trading in the $20 range years ago. The CEO was adamant that oil would eventually be much, much higher. He was right and as a consequence, the company did quite well. At the same time, someone buying an asset in 2013 is probably not too happy right now. But remember that most of these fields have production contracts that are about 25 years in length. That is a lot of time for price movement and it can be for the good or the bad. After you have made a discovery you have to make your decision based on sketchy projections and the range is quite large. Currently, Raymond James is suggesting Brent prices of $80 next year whereas the World Bank is saying $60, that is a huge discrepancy.
If you knew what the price of oil was going to be next week or next year you could make out like a bandit on the market....unfortunately there as many losers as winners in that game.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby Cliffhanger1983 » Wed 20 Sep 2017, 23:12:48

This doesn't really matter people because in a few years we are going to have permanent oil shortages and a massive price spike that will collapse the world economy and world governments.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby vtsnowedin » Thu 21 Sep 2017, 11:36:38

rockdoc123 wrote:Currently, Raymond James is suggesting Brent prices of $80 next year whereas the World Bank is saying $60, that is a huge discrepancy.
If you knew what the price of oil was going to be next week or next year you could make out like a bandit on the market....unfortunately there as many losers as winners in that game.

Well that is true enough and I understand that people make decisions on their own time scale but what is also true on a national level is that there will be a demand for oil not just for the next ten years but for thirty and even sixty years out and that no more large, cheap to extract, fields are ever likely to be found, so the oil you purposely leave in place will gain in value year after year until you finally extract it.
All water under the bridge now of course but the UK will soon be importing $100 oil to replace those $25 barrels they gleefully sold last century.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby dissident » Sat 23 Sep 2017, 09:13:20

Cliffhanger1983 wrote:This doesn't really matter people because in a few years we are going to have permanent oil shortages and a massive price spike that will collapse the world economy and world governments.


Some may try to fob this off as nonsense, but you are right. The current oil price is way too low for the reserves. So there is actually over-consumption and this will, like in price fixed socialist economies, lead to shortages. And unlike with cod fish there is no substitute for oil that could be shifted to in a short period of time. This transition gap is enough to bring down the global economy.
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Re: UK Out of Oil & Gas Within 10 Years

Unread postby vtsnowedin » Sat 23 Sep 2017, 11:32:09

dissident wrote:
Cliffhanger1983 wrote:This doesn't really matter people because in a few years we are going to have permanent oil shortages and a massive price spike that will collapse the world economy and world governments.


Some may try to fob this off as nonsense, but you are right. The current oil price is way too low for the reserves. So there is actually over-consumption and this will, like in price fixed socialist economies, lead to shortages. And unlike with cod fish there is no substitute for oil that could be shifted to in a short period of time. This transition gap is enough to bring down the global economy.
Once there is a shortage in supply that can't be overcome by increasing Capex prices will rise and over consumption will cease. The global economy will certainly change dramatically but a complete collapse is not certain.
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