Professor Alex Kemp, the single most respected commentator on the North Sea Oil and Gas business, says there is oil, and new discoveries, and many uneconomic finds available, which even at current estimates will see the North Sea Oil business beyond 2050.
Professor Kemp said that some oil and gas fields, including the Clair field west of Shetland, will last well beyond 2050. He has documented these cases and details behind his comments in a new Aberdeen University report “Illuminating the Future Potential from the North Sea”.
The report estimates there will be 271 new commercially viable developments opened up between now and 2050, and acknowledges that there will be a further 58 significant discoveries that he considers would be uneconomic to develop at the current oil price on top of the currently known 125 discoveries which remain parked for the same reason.
He said: “New commercially viable developments triggered over the period to 2050 include not only 25 fields currently being assessed for development, but 147 discovered fields not yet at the detailed planning stage, and 99 further discoveries resulting from new exploration over the period to 2045.
“The year 2050 is a convenient date at which to stop detailed modelling but the industry will continue beyond that date.
“Some existing producing fields such as Clair can confidently be expected to remain viable beyond 2050.
“Further, in our comprehensive database no fewer than 125 known existing discoveries remain undeveloped at 2050 because they are not commercially viable at the $90 oil price.
“Some have extremely high costs per barrel and may never be commercially viable. But, even the most bearish commentators on the oil market would agree that by 2050 real oil prices are likely to be much higher.”
He added: “At the year 2050 in our model there are also 58 new discoveries made between 2014 and 2045 which contain well over one billion barrels of oil equivalent but are uneconomic.
“Again, it can be expected that with higher oil prices, some will become economic.”
Prof Kemp also suggested that technological advances could lead to already decommissioned fields being reopened.
In the context of looking forward with confidence to the potential for an independent Scotland, Professor Kemp determines the principle that there is lots and lots of oil available to be recovered from our waters in the North Sea and Atlantic.
We all understand that oil price can vary, meaning that some fields viability will be affected by the forecast oil price, and also that some finds will become viable in time with the likelihood that oil price will increase over time.
The next point to elucidate is that not only does oil price vary, but technology advances – thus making some inaccessible fields accessible and some uneconomic finds viable. Necessity being the mother of invention, engineers and oil firms will constantly reach to recover the inaccessible and the uneconomic. Perhaps that explains why every oil capacity estimate from Westminster since 1970 has been on the low side!
Even under the current view, Professor Kemp (a man not given to wild predictions or flights of fancy) is satisfied that he can say the North Sea Oil industry will last beyond 2050.
At approximately 15% of our economy, Oil is not the underwriter for Independence, but it is a valuable part of our diverse economy in the early years of a better nation. It gives us the opportunity to right some of the Tory ills and to catch up with our north European neighbours in terms of economy and social provision. It gives us time to develop untapped talent and resources. It gives us industry and jobs in key areas of our country with realistic opportunity of further development on the west coast.
It’s that wee bit extra security that we Scots so desire. And it’s damn all good to us if it is squandered on Trident.