BP, Shell CEOs wade into spat on size of Scotland’s oil reserves
By Bloomberg
The chief executive officers of the largest U.K. oil producers waded into the dispute over the size of Scotland's remaining crude reserves, as the future of the energy industry becomes a key part of the referendum campaign.
BP Plc's Bob Dudley and Royal Dutch Shell Plc's Ben van Beurden put out statements saying they backed an estimate of oil reserves given by Ian Wood, the former chairman of oil engineer John Wood Group Plc, who published a report this year on the future of the industry. The pro-Independence campaign has endorsed higher estimates of potential North Sea production.
"BP has been in the U.K. North Sea for 50 years and we hope to operate here for many years to come," Dudley said. "However, the province is now mature and I believe Sir Ian Wood correctly assesses its future potential. It is important our plans are based on a realistic view of the North Sea's future potential."
Wood has said that the upper ceiling for remaining reserves is 24 billion barrels and the likely total is probably nearer 16 billion. That compares with the 42 billion barrels that's been drilled from the North Sea so far. Two Aberdeen-based academics Alex Russell and Peter Strachan have said that technological advances made that forecast unduly pessimistic.
"Ian Wood is right in his technical assessment that the amount of remaining oil and gas that can be profitably extracted from the U.K. North Sea is a function of price and cost," Shell's van Beurden said in a statement. "As existing infrastructure gets older and output falls, costs will go up and tax receipts will come down."