North Sea oil 'will last for another half century'

The North Sea is not running out at all, industry, analysts say.

The full extent of reserves in the sea has never been known - and it has always been a commonly-held perception that supplies will soon dry up.

But latest analysis suggests there may be enough in reserve to equal all the oil recovered from under the sea since the Seventies.

Some experts believe that up to 30billion barrels are still in the ground.

And following evidence that 300 fields off the coast of Britain are still to be explored and tapped properly, reserves could be even greater, it is thought.

The details have led to calls for a windfall tax on the oil industry, which is sitting on estimated £4.3billion of excess profits caused by spiralling prices.

Yesterday, Scotland's First Minister, Alex Salmond, wrote to the Prime Minister asking for a North Sea oil tax to benefit Scots.

Explaining the size of reserves in the North Sea, Alex Kemp, professor of petroleum economics at Aberdeen University, said: 'There is still a substantial amount left. The remaining reserves on central estimates could be 20-22billion barrels equivalent, and on optimistic estimates could be over 30billion.'

Professor Peter O'Dell, of the Erasmus University in the Netherlands, agreed.

He believes there are 44 years of oil left. '

There are at least 20, 25, even 30billion barrels of the stuff left and that's quite a lot. It's not quite as much as we've used already but it's not far short.

'Moreover, there are still parts of UK Continental Shelf that have never been examined at all in any great depth. So that could be the low end of a range that could take us into a period when we have access to as much oil again as we've already used.'

Advances in technology and the rising price of oil mean it is both possible and economically viable to recover more oil from the North Sea.

The Scottish National Party believes oil companies such as BP and Shell have covered up the extent of reserves for fear of being hit with new taxes.

They have raked in multi-billion pound windfalls in the last few years as oil has risen in price.

Mr Salmond, a former oil economist, said: 'If oil companies said,'Look, we've got lots of reserves in the future', the immediate response of Government would be to stick taxation up. So there was a kind of incentive for the big companies to underplay the significance.'

His plan for a tax on North Sea oil to be diverted to the Scottish people would mirror schemes in Norway and Canada.

He added: 'In the case of Norway, the most recent estimate places the value of their fund at around £186billion, and by 2010 this could stand at a minimum of £250billion. The build-up of such funds reinforces the compelling case for such a fund to be developed for Scotland.'

However, the idea has already been rejected by Chancellor Alistair Darling, who said tax revenues need to be viewed 'in the round'.

Profits: oil giants are raking in multi-billion pound windfalls as prices balloon

The North Sea's potential was disclosed by a BBC Scotland documentary called Truth, Lies, Oil And Scotland, shown last night.

It told how the Forties Field, one of the biggest in the North Sea, is still producing oil 33 years after the first supplies were pumped ashore.

BP sold the field five years ago to the Texas-based company Apache, which has invested £1billion in facilities, exploration and recovery. Its chief executive, Jim House, told the BBC oil flow rates have increased.

'Forties was definitely showing her age when Apache took it. At the time when it   was sold, predeveloped reserved were in the region of 150million barrels. We ended last year with 200million barrels on our books.'

Shell has also sold off platforms in the North Sea to more aggressive companies such as Fairfield Energy and Talisman Energy

Firms such as these are extending the life of North Sea oil fields through new exploration and wells.

John Forrest, of Talisman, said the company is drilling wells to reserves that could not be reached five or ten years ago. 'We're bringing on fields that we've known were there for quite a long time but they just weren't economic or we didn't have the technologies.

'We recently brought on a field without drilling any more wells. We just had better technology. We foresee an economic life at that installation until the late 2030s and that's with the ideas we currently have. We think other innovations will come along that will almost certainly extend that.'