Britain faces £200bn oil loss
$ fifty oil prices could lead to the early decommissioning of North Sea facilities and the decline of 6bn barrels of oil 
Picture: Alamy
In a stark warning to the Federal government over the foreseeable future of the North Sea, one particular of the oil industry’s major figures, has warned that 6bn barrels of oil reserves – a third of what continues to be underneath the seabed – well worth £200bn may be abandoned unless radical steps are taken to reform the tax routine for offshore drilling.
In an distinctive job interview with The Sunday News Agency in Aberdeen, Sir Ian Wooden, a billionaire Scottish oil expert, stated: “The risk is that if we shed momentum now and lose recourses and property, and really do not get the fiscal routine suit for a fairly highly mature region, we will occur down to ten-11bn (oil reserves). That is a large economic loss and employment reduction for the Uk.”
In a report for the Authorities revealed last 12 months on how to maximise recovery of oil from the North Sea, Sir Ian explained that the estimated reserves that could even now be developed from the province have been in excess of 16bn barrels of crude. Nonetheless, Sir Ian – founder of Wooden Team, one particular of the UK’s premier oil and fuel engineering organizations – now believes there is a threat that $ fifty oil costs could lead to the early decommissioning of North Sea amenities and the loss of 6bn barrels of oil. The transfer would mean a potential £200bn reduction to the British economic climate in income and expense.
The Chancellor George Osborne is under stress to produce a package deal of tax cuts and incentives these kinds of as right funding exploration work in the North Sea when he provides his last price range of the existing Authorities in March. Close to 450,000 jobs are immediately supported in the Uk by means of the oil and gas industry, which is largely centred in the North East of Scotland all around Aberdeen.
Previous 7 days, two of Britain’s premier international oil and gasoline companies, BP and BG Team, gave dire warnings more than the future of the North Sea as they exposed slipping earnings and strategies to reduce billions of kilos of investing.
Bob Dudley, chief government of BP predicted that a third of the oil fields working in the North Sea could be unprofitable with oil prices at their recent stages.
“The North Sea decrease is unavoidable,” mentioned Mr Dudley, including that the oil market was heading into a profound time period of downsizing that would need firms this sort of as BP to “reset for the up coming numerous years”.
The BP chief when compared the existing surroundings with a equivalent source-driven shock, which transpired in the nineteen eighties following the sudden emergence of the North Sea as a main oil-creating province.
Andrew Gould, govt chairman at BG Team, echoed Mr Dudley’s worries above the long term of the North Sea in the present surroundings as he unveiled a slump in profits at the gas-focused operator.
Mr Gould explained: “I really do not feel you can truly, at these oil costs, hope for a significant resurgence of the North Sea on the basis that there are a good deal of other locations in the planet in which the reserve life is a whole lot more promising than it is in the United kingdom sector of the North Sea.”
Jenny Laing, the chief of Aberdeen Town Council, is now contacting on the government in each Westminster and Edinburgh to help a £2bn programme of investment and infrastructure investing in the metropolis to support it contend from other intercontinental oil hubs this kind of as Jebel Ali in Dubai, Perth and Houston.
Ms Laing mentioned: “The decline of the oil and gas industry in Aberdeen would be catastrophic for the British isles financial system.”
Hundreds of employment in Aberdeen have previously been lost and numerous far more are anticipated to go as the sector adjusts to a possibly extended time period of $ fifty oil rates. The higher price of operating in the North Sea in which some firms require an oil price in surplus of $ eighty per barrel to just break even tends to make the province susceptible to cost fluctuations and the plan choices of the Organisation of the Petroleum Exporting Nations around the world (Opec).
However, in accordance to Ms Laing, modify was already starting to grip the market in Aberdeen ahead of the existing slide in costs.
“We’ve noticed redundancies presently but which is not necessarily because of the falling oil value. Operators had been hunting at decreasing their expense foundation just before oil costs strike $ 50,” she explained.