by Philip Thornton
15-06-05 Britain suffered the steepest fall in oil production of any country last year, according to a report that will fuel fears of an end of the era of North Sea oil revenues.
BP, the global oil giant, said North Sea production fell by 10 % last year. The
drop of 230,000 bpd was the biggest fall of any oil producing nation. Its annual
statistical survey also showed that the UK became a net importer of gas for the
first time last year. Last year government figures showed the UK had fallen into
an oil deficit for two months in the autumn for the first time since 1991.
Kjell Aleklett, the president of the Association for the Study of Peak Oil, said the UK Government's forecasts showed oil production falling one-third from its peak by 2020.
“The UK produced most of its oil when it was cheap and they sold it for cheap
money,” he said. “Now they need to buy it back at more than twice the price they
sold it at.” He said the running down of oil would present the Government with
problems for its current account " the difference between money coming in and
going out of the economy " and for its future economic performance.
“Such a dramatic change in the economy makes it hard to balance things. When
the oil industry went up it forced money away from other sectors, but when it
goes down there's nothing to compensate for it,” Mr Aleklett said.
He added that the reversal of the UK's surplus on gas was a “price to be paid”
for the so-called 'dash for gas' during the Eighties miners' strike when the
Government switched to gas from coal for electricity generation.
The Department of Trade and Industry dismissed the concerns over oil running out, pointing to its own figures showing applications for new North Sea oil and gas licences. Malcolm Wicks, the Energy minister, said firms were applying for a record 279 blocks, the largest number applied for since 1972.
He said it was “a solid vote of confidence from the industry in the potential
development of North Sea fields”, adding: “The increase in applications... is a
vindication that there are significant development opportunities still available
for the right firm.”
The UK Offshore Operators Association said there were 28 bn barrels of oil and gas still to recover.
Peter Davies, BP's chief economist, said: “Proved reserves of oil, gas and coal
remain more than adequate to meet the world's growing needs in aggregate for the
immediately foreseeable future.”
Source: The Independent