Scotland politics

Scottish independence: Experts set out oil prediction views

Generic picture of oil platform Image copyright Thinkstock
Image caption The Scottish and UK governments have clashed over the future of the oil and gas industry

A leading oil economist has predicted almost 100 new discoveries in the North Sea over the next 30 years - as a major industry figure warned against basing an independent Scotland's economic future on "exaggerated" claims.

Prof Alex Kemp said there could be 99 commercially viable oil finds by 2045.

His report came as Sir Ian Wood claimed some oil forecasts were "misleading".

The Wood Review author called for "realism to take precedence over fantasy" ahead of the referendum.

In a paper on the long-term potential of North Sea oil and gas, Prof Kemp outlined 99 "viable" finds.

But he also argued there could be a further 58 discoveries which would be uneconomic by 2050 but could later become viable with higher oil prices and technological improvements.

He also highlighted 147 already discovered fields which were not yet at the detailed planning stage and 25 fields currently "being assessed" for development.

Prof Kemp, from the University of Aberdeen, said some existing producing fields such as Clair "can confidently be expected to remain viable beyond 2050".

He added: "Further, in our comprehensive database no fewer than 125 known existing discoveries remain undeveloped at 2050 because they are not commercially viable at the $90 (real) oil price.

"In aggregate they contain total potential recoverable reserves in the range 2.5-3 billion boe (barrels of oil equivalent).

"Some have extremely high costs per barrel and may never be commercially viable.

"But, even the most bearish commentators on the oil market would agree that by 2050 real oil prices are likely to be much higher, and thus more developments should be triggered by that time, even with the expected reduction in infrastructure availability."

Image caption Prof Kemp forecasts nearly 100 new discoveries by 2045 which could be commercially viable

SNP energy spokesman Fergus Ewing welcomed the paper.

He said: "Whilst the No campaign like to talk down Scotland's oil wealth - despite enjoying the riches that flow from it into the London Treasury - this expert opinion makes clear that Scotland's oil and gas story is far from over."

Meanwhile, Sir Ian Wood claimed Scots voters were being "misled and influenced by highly inaccurate forecasts, false promises and misleading information" over future oil estimates.

Sir Ian, who has forecast there are about 15 billion to 16.5 billion barrels of recoverable oil left in the North Sea, singled out a report by N-56 - a business organisation founded by Yes Scotland supporter Dan Macdonald - describing it as "an insult to the Scottish people" ahead of the referendum.

It estimated there could be another 21 billion barrels from unconventional shale reserves in the North Sea.

Sir Ian told a press conference in Aberdeen: "Nothing could be further from the truth.

"Reserves are hydrocarbons which are technically and economically proven. To be classed as reserves, we have to know what is there and be certain it can be extracted in an affordable way.

"This report is one of the worst of many examples of false or exaggerated claims, providing misleading information at a crucial point in the debate."

Image copyright BBC news grab
Image caption Sir Ian Wood's estimate of oil reserves is lower than figures used by the Scottish government

Martyn Tulloch of Tulloch Energy, who co-authored the N-56 report, said: "We noted with interest the comments from Sir Ian Wood and are surprised as they seem rather at odds with a wealth of experts in this field who have given their backing to this report.

"They also seem to be at odds with the views of the UK government itself, with a senior official within DECC (Department of Energy and Climate Change) stating offshore unconventional oil and gas are an 'enormous new play' for the North Sea."

Sir Ian also said the Scottish government's plans for balancing the books under independence were based on the "highly unlikely scenario" of recovering 24 billion barrels.

He has argued that the figure from Oil and Gas UK, used in the Scottish government's White Paper, is between 45% and 60% too high.

Sir Ian said: "This is three billion barrels ahead of the maximum 12-21 billion latest estimate from UK government and frankly looks to be significantly unachievable.

"By basing our economy and therefore the future of our children's quality of life, public services and jobs on unrealistic recovery of reserves let alone unproven reserves is a huge gamble and the stakes are too high."

Future potential

The boss of BP said Sir Ian had correctly assessed the future potential of the North Sea.

Group chief executive Bob Dudley added: "As a major investor in Scotland - now and into the future - BP believes that the future prospects for the North Sea are best served by maintaining the existing capacity and integrity of the United Kingdom.''

Industry body Oil & Gas UK said it would "urge caution about predicted future potential from the North Sea".

A spokesman added: "For example, last week's N-56 report on offshore unconventional gas made considerable predictions based on largely unproven and untested methods.

"Prof Kemp's modelling identifies future recoverable reserves, but these will be more difficult and therefore even more expensive to produce.

"Given the technical, pricing and cost uncertainties, any long-term production and tax forecasts are inherently uncertain and should be treated as such given the broader commercial pressures on the oil and gas industry."

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