The Prospects for Activity in the UKCS to 2050 Under 'Lower for Longer' Oil and Gas Price Scenarios, and the Unexploited Potential

93 Pages Posted: 14 Sep 2017

See all articles by Alexander G. Kemp

Alexander G. Kemp

Aberdeen Centre for Research in Energy Economics and Finance, University of Aberdeen

Linda Stephen

University of Aberdeen - Business School

Date Written: February 25, 2017

Abstract

Using financial simulation modelling, including the Monte Carlo technique, this study makes projections of long term activity in the UK Continental Shelf under "lower for longer" oil and gas price scenarios. These were (1) $50 per barrel, and 40 pence per therm, and (2) $60 and 50 pence, all in real terms. The Monte Carlo technique was employed to project the distributions of discoveries from new exploration and the development and operating costs. The modelling was also conducted on a full data set of sanctioned fields, probable and possible fields, and technical reserves to project production, investment costs, operating costs and decommissioning costs to 2050. The modelling was undertaken separately for the 5 main producing areas of the UKCS. Key findings were that by 2050 up to 11 billion barrels of oil equivalent (bn boe) could be economically produced with a large unexploited potential of c. 5 bn boe, mostly located in small fields.

Keywords: Low oil prices and future activity in the UKCS, financial simulation modelling, Monte Carlo technique, sensitivity analysis

JEL Classification: D21, D24, G17, G18, G31, Q35, Q47

Suggested Citation

Kemp, Alexander G. and Stephen, Linda, The Prospects for Activity in the UKCS to 2050 Under 'Lower for Longer' Oil and Gas Price Scenarios, and the Unexploited Potential (February 25, 2017). Available at SSRN: https://ssrn.com/abstract=3035838 or http://dx.doi.org/10.2139/ssrn.3035838

Alexander G. Kemp (Contact Author)

Aberdeen Centre for Research in Energy Economics and Finance, University of Aberdeen ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom
(0)1224 272168 (Phone)
(0)1224 272181 (Fax)

Linda Stephen

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom

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