Will the no vote result in greater investment in to the north sea
Whilst it is largely agreed that the No vote in the Scottish referendum was welcomed by those in the oil and gas industry, they are just as quick to point out the challenges facing the North Sea and its dwindling reserves; currently estimated to be anywhere between 15bn and 24bn barrels. Focus needs to be placed on investment that will result in expanding the lifespan of the oil reserves in the North Sea.
Having previously declaring Scotland should remain a part of the UK Ben van Beurden, chief executive of Royal Dutch Shell commented “Shell welcomes the decision by the people of Scotland to remain within the UK, which reduces the operating uncertainty for businesses based in Scotland.”
British Oil and Gas CEO Malcolm Webb has called for Regulatory reform, as outlined in the Wood report, as well as fiscal reform, as priorities for the future of the Scottish industry. Also important is to rise to the cost and efficiency challenge of the mature North Sea. Focus needs to be on the long term future, and to do this there has to a commitment to plugging the skills gap – motivating more engineers coming out of Scottish universities in to the oil industry.
As industry experts argue about the quantity of oil available under the North Sea, other academics focus on how to ensure the skills and technologies are available to enable access to these reserves. Whilst focusing on the production side of the industry is still important, consideration must also be given to developing the supply chain, which will grow in importance and significance as the supply reserves decline.
Believing that new technologies could be a game changer for the industry and calling for more investment to reverse the decline in North Sea production, Professor Mehran Sohrabi, director of the university's centre for enhanced oil recovery, released a statement stating they think they now have the answers to overcome the issues in extracting the current reserves. There solution has the potential to make a huge impact on the current output of the North Sea's oil production.
Wood Mackenzie, a leading industry consultancy group, warns that the future of the industry relies on the ability to extract oil that doesn’t cause major impacts to the environment and the ability to locate new reserves. As currently these are the major hurdles that are holding back the growth potential.