North Sea oil "could last at slightest a decade" Business The Guardian

The Buzzard oil height on the Buzzard oilfield in the North Sea. Photograph: Sean Smith/Guardian

Britain"s offshore oil and gas fields could still be delivering 1.5m barrels a day by 2020, sufficient to prove 35% of UK appetite demand, according to industry traffic physique Oil Gas UK – but usually if high fuel prices and taxation breaks mix to have viable a flourishing reserve of scrutiny and growth projects in the North Sea.

Without renewed investment, prolongation from already grown up fields, right away assembly about two-thirds of Britain"s appetite needs, will dump to 0.5m barrels a day by the finish of the decade, representing usually 11% of appetite demand.

Earlier this month Ofgem published the strongest notice to date that Britain was streamer for an appetite crisis. "For the subsequent dual to 3 years with gas reserve and appetite hire availability, we are in a abundant position," Ofgem arch senior manager Alistair Buchanan said. "The complaint is the speed at that it deteriorates. To wait for a couple of some-more years [without you do anything] could means us trouble. We would get down to historically low levels of margins of plant, to when you are starting to ask if you have sufficient appetite stations."

Having surveyed 70 companies, Oil Gas UK believes descending investment during the past 4 years has been a critical cause pushing down oil and gas prolongation levels. Last year prolongation fell 6% to 2.48m barrels.

The series of growth and scrutiny wells drilled in 2009 marked down by 22% and 40% respectively, the run organisation found. Meanwhile collateral output has declined by 20% in the last 3 years. This year, however, could see a medium liberation Oil Gas UK forecast, bringing investment behind on top of £5bn.

In new months the industry has identified up to 11bn barrels of oil and gas in new and existent projects, a pointy climb on formerly years. It takes UK offshore pot close to 25bn. But the cost of extracting the newly identified deposits, most of them located in low H2O in the senior manager North Sea or to the west of Shetland, is estimated at £60bn. Production costs at new sites is estimated to be on normal 20% higher than for existent projects.

Speaking as Oil Gas UK published the annual forecasts for offshore exploration, arch senior manager Malcolm Webb said: "Securing all the investments identified by the consult will direct movement from industry to revoke costs and urge potency and from supervision to reduce prolongation taxes and abate the UK and EU regulatory burden."

Recent years have already seen the supervision accede to estimable prolongation taxation breaks to assistance dear projects in technically severe deep-water fields.

"As not long ago remarkable by multiform supervision ministers, the UK"s oil and gas industry is a outrageous item to this country. It not usually creates a critical grant to the economy but can additionally assistance secure appetite reserve for decades to come," pronounced Webb.

"The supervision has taken multiform acquire stairs over the last eighteen months in shortening the rate of taxation on assorted sorts of new fields; we right away need to work together to magnify that routine to ring alternative new and existent fields and definitely inspire investment in this critical UK appetite industry."