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Oil - The Big Picture

North Sea Oil Reserves

As of writing its just turned to the year 2007 and challenging times are ahead for the North Sea oil companies. The current oil reserves in the North Sea are beginning to run low. Some have estimated that about ten to fifteen years remain before they 'run dry'.

Its a far cry from the boomtown years of the 1970s, 1980s and the late 1990s. In fact in 1975 when the first oil tanker came into dock with its holds brimming with 'Black Gold.' The then Energy Secretary Tony Benn held aloft a vial of the oil extracted and declared "I hold the future of Britain in my hand." The known oil reserves ballooned when, after the Argyll oil fields where discovered, came the Brent and the Forties fields. It became oil boomtown in Aberdeen as it transformed into the oil city of Europe, with helicopters flying in and out of Aberdeen with oil workers crammed on board. Britains economy was turbo charged for the future. The high water mark for North Sea oil production came during the dot com boom of 1999 where a staggering 2.9 million barrels a day was recorded. The Brent Bravo platform is reputed to of managed half a million barrels a day alone! Thirty years on the production of oil in the North Sea is now on a seeming terminal decline. A galling point in question is that much of the oil was exported during the 'cheap oil years'. Natural Gas too is on the decline, so much so that as of 2007 it is now that Britain will become 50% import dependant on its oil and gas in the near future.

Despite this grim fact it must be said that the sky is not falling and fuel prices aren't about to hit the roof just yet. The naysayers and pessimists may paint a very bleak future for Britain and the world when it comes to oil, but the fact remains that up to 28 billion barrels of oil alone remain undiscovered under the North Sea.
Its something the big oil companies certainly are aware of and don't want to loose their place as oil giants anytime soon. Which is why they are spending record amounts in exploratory drilling and surveying new zones for extraction. As recent as June 2006 a record amount of oil exploratory appications were made.
To surmise the situation, the easy to get oil is definately running out, but there is still plenty of oil remaining. Even in the current 'live' reserves there is a phenomenon known as 'reservoir recovery'. This is where after a platform is deactivated and the oil field believed almost dry, it can 'recover' oil slowly from undiscovered pockets and areas unexplored to the extent that the platform can suddenly be back in business again. Indeed with the improvements and refinements in technology oil extraction is certainly improving. Seismic survey ships and exploratory oil teams are being heavily invested in as the race is on to discover the 'next' Brent field. The problems faced are that the easy to extract oil fields typically tend to be in less than 100 meters of water while the 'new' oil zones are in much deeper water. The oil extraction is likely to be more expensive for operators than before but when oil prices stabilise around per barrel reach the $85 - $100 mark it becomes increasingly viable for the deep water fields to be concentrated upon.

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The Future of Oil


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