Optimizing Oil and Gas Depletion in the Maturing North Sea with Growing Import Dependence

Posted: 29 Feb 2008

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

Abstract

Hydrocarbon production from the UK Continental Shelf has now passed its peak. Net gas import requirements started in 2004 and increase substantially. The remaining reserves of both oil and gas are substantial, but are distributed largely in relatively small fields. Historically, depletion policy has generally been determined by market forces with the need for early revenues being the major consideration. Currently, policy is concentrating on enhancing development and depletion by removing perceived barriers. It is possible to construct a case for reducing the depletion rate. This involves significant risks and costs, and it is concluded that optimization is more likely to be achieved by minimizing the resource costs of extraction. This entails the encouragement of both new field developments and incremental investments. Current licensing and regulatory arrangements generally recognize the need to enhance activity on fallow blocks/discoveries and to remove barriers facing entrants. These policies should be pursued with vigour.

Keywords: Griffith crack, rectangular layer, shear stress, stress intensity factors

Suggested Citation

Kemp, Alexander G. and Stephen, Linda, Optimizing Oil and Gas Depletion in the Maturing North Sea with Growing Import Dependence. Oxford Review of Economic Policy, Vol. 21, Issue 1, pp. 43-66, 2005, Available at SSRN: https://ssrn.com/abstract=906389

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
640
PlumX Metrics