ECONOMIC REPORT 2013
18
If companies invest in projects which they
deemto have a greater than 50 per cent chance
of being developed (‘probable reserves’), as is
reasonably expected with the passage of time,
a further 2.5 billion boe of oil and gas will be
recovered. Additionally, there are resources
with, currently, a less than 50 per cent chance
of being developed (‘possible reserves’). These
account for a further 1.5 billion boe, although
many of these projects are technically difficult
and/or marginal in commercial terms, hence
their classification as ‘possible’. The total
resources in companies’ plans, ranging from
producing fields to possible new or brownfield
developments, is 11.4 billion boe.
The latest figures from the Department of
Energy and Climate Change (DECC) show
a range for potential additional resources
(PARs) of 1.5 to seven billion boe and
yet-to-find resources (YTF) of six to 17 billion
boe. However, Oil & Gas UK has taken a
more conservative position, reflecting the
uncertainties in these ranges, and believes it
is more prudent to consider PARs in the range
of one to four billion boe and YTF resources of
three to nine billion boe. The forecast of total
UKCS reserves and resources, as at the end of
2012, is depicted in figure 7. While it indicates
the potential range in each category, caution
is required in its interpretation and it should
not be assumed that the top of each range will
be achieved.
None of these can be realised without
substantial expenditure. If the 11.4 billion boe
in companies’ current plans are to be realised,
around £300 billion (in today’s money) will be
required:
• £100 billion of capital investment to
develop both green- and brown-fields.
• £160 billion to operate these assets
throughout their productive lives.
• £35-40 billion to decommission them after
production has ceased.
Significant additional investment will be
required if PARs and YTF resources are to be
recovered from the UKCS. This is because of
the need for further extensive exploration and
the fact that unit costs of development and
operation are now approaching £30/boe as
reserves become more difficult to extract.
Figure 7: Forecast of UKCS Reserves and Resources (as at the end of 2012)
0
5
10
15
20
25
30
Reserves / Resources (Billion boe)
Source: DECC, Oil & Gas UK
Yet To Find
3-9 bln boe
Potential Additional
Resources
1-4 bln boe
Possible Reserves
1-3 bln boe
Probable Reserves
2-4 bln boe
Existing Fields and
Sanctioned Investments
7.4 bln boe
Produced in 2012
