The “easy days” of exploring for oil and gas in the North Sea are over – that’s the view of analysts at business consultancy Deloitte.
Their new report out today reckons drilling activity on the UK’s Continental Shelf needs to double to more than 90 wells per year over the next two decades.
That’s if industry is to make the most of an estimated $1.3 trillion (£825bn) worth of oil and gas which potentially lies under the seabed, finds the report.
This figure is based on successful pumping up the 15 billion barrels of oil equivalent (boe) which it is estimated could be recovered. It assumes a $90 per barrel oil price.
Derek Henderson, senior partner in Deloitte’s Aberdeen office says: “Only about a third of the known recoverable resources in the UKCS are left. The ‘easy oil’ days are gone and we need a fiscal regime that is more reflective of the current state of the basin.”
He believes the “right changes” to the tax system could mean “billions of pounds of difference” to the UK’s stretch of the North Sea.
The comments come ahead of the Chancellor’s Autumn Statement in a week’s time when he will outline tax plans for the next year