13 November 2004
Oil industry economist Professor Alex Kemp sounded an upbeat note yesterday at a conference in Aberdeen, forecasting increased North Sea activity supported by continuing high oil prices.
Prof Kemp said the present very high prices would encourage a modest but worthwhile increase in exploration.
And although prices would not hold the current levels of 40-50 a barrel, they would remain above 30 for the foreseeable future, he said.
"This will help to accelerate progress because oil can be sold forward above 30 and so hedge risks," he added.
A new paper from Prof Kemp and colleagues at Aberdeen University forecasts that if various initiatives to encourage exploration and production bear fruit the pace of decline in North Sea production will moderate.
He believes industry body Pilot's target of three million barrels of oil equivalent per day (boepd) production in 2010 will be met. The paper also suggests that production will still be two million boepd in 2020. This year's likely outcome is average daily production of 3.8million barrels.
Prof Kemp was speaking on the second day of the annual Overview of the North Sea Oil and Gas Industry at Aberdeen University's King's College conference centre.
The two-day event, hosted and organised by the college of physical sciences, was being staged for the 11th year.
Prof John Wils, formerly director of operations and technical affairs at the UK Offshore Operators Association, chaired the conference. He said it was directed principally to non- specialists to give them a chance to find out more about the North Sea oil and gas industry, and a number of senior bankers and lawyers were among the 60 delegates attending.
"People outside the oil industry are very interested in the changing North Sea situations - new entrants and assets changing hands - and the opportunities that gives them to do business," he said.
The first day of the conference focused on all aspects of the oil industry from licensing to exploration drilling, field developments, subsea technology and infrastructure, while a BP presentation on decommissioning highlighted the uncertainties and the massive task ahead.
Yesterday, the Department of Trade and Industry presented a paper on the regulatory side of decommissioning, which also noted the challenges faced by the industry. Another presentation by the Health and Safety Executive focused on the need for operators to be vigilant in preserving the integrity of ageing North Sea infrastructure.
Source: The Press & Journal