Can Long Term Activity in the UK Continental Shelf (UKCS) Really Be Transformed?

University of Aberdeen, North Sea Study Occasional Paper No. 139

37 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: April 28, 2017

Abstract

This study employs financial simulation modelling, including use of the Monte Carlo technique, to project oil and gas activity levels in the UK Continental Shelf to 2050 with an oil price scenario gradually rising from 2019 onwards to reach $100 per barrel in real terms in 2050. The Monte Carlo modelling was employed to project the distributions of the sizes of new discoveries and their costs. The modelling was undertaken on a full data set of undeveloped discoveries, and was conducted separately using a data set of all the undeveloped discoveries in the 5 main geographic areas of the UKCS. A key finding was that from 2017 to 2050 around 16 billion barrels of oil equivalent could be produced, with the great majority of the current undeveloped discoveries being exploited. But a key requirement for this outcome is that unit development and operating costs were constrained to current levels in real terms.

Keywords: Financial Simulation Modelling, Monte Carlo technique, Long-Term Activity in the UK Continental Shelf with Oil Price Reaching $100 in 2050 in Real Terms

JEL Classification: G18, G31, H21, Q35, Q47

Suggested Citation

Kemp, Alexander G. and Stephen, Linda, Can Long Term Activity in the UK Continental Shelf (UKCS) Really Be Transformed? (April 28, 2017). University of Aberdeen, North Sea Study Occasional Paper No. 139, Available at SSRN: https://ssrn.com/abstract=3035846 or http://dx.doi.org/10.2139/ssrn.3035846

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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