Companies cant afford to drill for North Sea oil and gas

By Rowena Mason Published: 6:45AM GMT twenty-four February 2010

A consult of 70 active companies by industry physique Oil & Gas UK shows that there are some-more projects underneath care than at this time last year.

However, difficulties raising financial and the actuality that the easiest and thus cheapest pot to remove have already been exploited equates to fewer projects are essentially being developed. This will lead to a tumble in the UK"s done at home oil prolongation and enlarge the need for imports.

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There are 11bn barrels of oil and gas in existent projects, up 15pc from the prior year sufficient to encounter half the UK"s direct in 2020.

However, companies will need to lift �60bn of collateral outlay to remove this oil.

Oil companies are formulation to remove usually 5.25bn barrels from authorized projects, up from a aim of 6bn barrels at this time last year.

Mike Tholen, the industry group"s economics executive and writer of the report, pronounced certainty had improved, but the investment meridian was still not good.

"The enlarge in the series of new UK oil and gas developments underneath care is, on the one hand, encouraging. It confirms the idea that the province, whilst mature, has decades still to flourish.

"This is a high record industry and companies have grown and go on to muster the majority appropriate and majority modernized record to clear the UK"s oil and gas resources.

"However, even that is not proof enough, with pictures by the prolongation decrease and descending investment seen over new years. Things are done no simpler by the tumble in indiscriminate gas prices."

UK prolongation fell by 6pc, in line with usually disappearing outlay over the last couple of years. Companies extracted 2.48m barrels of oil and gas a day, that reflects the 20pc dump in collateral outlay given 2006. It is expected that outlay could ease serve to 2.35m barrels of oil homogeneous per day this year.

However, Oil & Gas UK believes investment could collect up subsequent year, potentially rising on top of �5bn from �4.7bn. The sum series of wells drilled has forsaken by roughly a entertain to 130, whilst the series of scrutiny and estimation training projects fell by 40pc to 65 wells.

Industry run groups have been job for larger taxation breaks from the Government to inspire some-more growth of small fields.