How Long Will the UK's Oil Reserves Last?
Nov 06 2017 Comments 0
As one of the world's biggest superpowers, the UK knows a thing or two about saving for a rainy day. And according to the latest statistics from the Oil & Gas Authority (OGA) petroleum isn't exempt. A recent study reveals that the UK currently has access to 10 to 20 billion barrels of both "discovered" and "undiscovered" potential. At present consumption levels this could sustain UK oil production for two decades.
So what exactly is the UK sitting on? The OGA maintains that these "significant petroleum reserves" include 7.4 billion barrels of undeveloped oil in already discovered locations. It also asserts the nation has access to around 5.7 billion barrels of "proven and probable UK reserves." Based on current production forecasts the report states that these reserves could fuel production for at least 20 years. If further undeveloped resources can be matured and exploited, the two-decade production timeline could stretch for even longer.
OGA cites immature reserves as "significant opportunity"
Developing contingent resources is a top priority, with the OGA maintaining that immature reserves present "significant opportunity for the continued development of the UK's petroleum resources." Of course, maturation calls for cash. This means the UK will have to invest significantly in new field developments and incremental projects if it wants to leverage its conditional resources.
"Future success of the basin requires attracting additional investment, implementing technology and company collaboration on new and existing developments," comments OGA operations director Gunther Newcombe.
Big plans to tap UKCS
While it's a huge undertaking Newcombe is confident that Britain will rise to the task, asserting "The UKCS is a world-class petroleum province with 10 to 20 billion barrels of remaining discovered and undiscovered potential." He adds that "The OGA has an important role in helping to steward this resource base, revitalise exploration and maximise economic recovery, working closely with industry and government."
£9 billion investment needed to boost replacement ratio
There were some causes for concern, with the report warning that the replacement of proven and probable reserves is a concern. In 2016 around 600 million barrels were produced, though just 80 million barrels of contingent resources were matured into recoverable reserves. This equates to a modest reserve replacement ratio of 13%. If the UK wants to hit a reserve replacement ratio of 25% over the next five years it will need to invest around £9 billion, which represents an average unit development cost of £12 per barrel.
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