Huge Oil Investments Perk Up North Sea
The North Sea is the target of heavy oil investments this year, and these could spur a surge in oil production in the region. According to reports, new oil wells – all 14 of them – will be come into production this year.
Analysts estimate that this year’s oil production will run to about 470 million barrels – virtually a record increase from production levels three years ago. Malcolm Webb, a regional energy expert, disclosed that this volume is five times more than the recent three-year production average.
Come 2017, outputs are expected to grow to 2 million boe per day, up by 33% from 1.5 million boe per day for 2013.
The projected North Sea investments, this year and up to the medium term, are a far cry from the investment scenario back in 2000. There was little money pouring into the sector, and experts find fault in the UK’s volatile tax system existing around that time.
With newer and much larger investments now flooding the region, that era will soon be long gone.
The seemingly extended productive life of oil fields in the region is rooted in recent technology that now aids in releasing hard-to-reach oil reserves. Many years ago, these oil reserves were labelled as “unviable” due to the absence of new and more economical extraction methods during those times. Presently, it’s a different story. These same oil fields are now considered productive and are estimated to remain so in the very long term.
During the past months, news about big oil companies’ plans to invest in oil development in the region swamped industry headlines. Norway’s Statoil invested $7 billion in the Mariner project about two months ago, while BP poured $4.5 billion into the Clair Ridge project at a much earlier date.
Estimates reveal that about 20 billion barrels of oil in the UK’s central shelf remains to be tapped. Some experts even believe that the UK can look forward to three more decades of productive life from these fields.
Webb cautioned, however, that despite the revival of oil development and production in the region, additional funding is required to maintain productivity of some oil fields which are already at their peak.