THE future of the UK North Sea is at a tipping point, a gathering of oil and gas industry leaders was told in Aberdeen yesterday.
Billions of barrels of oil are still to be tapped from the region but unstable fiscal policy, European Union regulation and loss of infrastructure will determine how much of it is actually recovered, according to Paul Warwick, UK and Africa president at ConocoPhillips.
Mr Warwick was speaking to more than 400 industry leaders on the future of the UK North Sea during an Oil and Gas UK event in the Aberdeen Exhibition and Conference Centre.
He said: “I think the situation we have in the industry is at a tipping point.
“We could sustain it for another 30, 40 or more years but if we are not careful, increased taxation and increased regulation . . . could make us struggle to deliver the remaining reserves. What we know is that capital is portable and operates in a competitive world. If the North Sea is not attractive, people will go elsewhere.”
He said large projects such as the £4.5billion Clair Ridge development, being led by BP but in which ConocoPhillips is a partner, and Statoil’s recent Aldous/Avaldsnes discovery – described as potentially one of the three biggest in the North Sea – should give the industry confidence.
Mr Warwick also warned the audience that the March tax grab by the UK Government would have an impact on investment, a point echoed by BP’s North Sea regional president, Trevor Garlick, who said: “The reality is the impact of the tax regime will be felt in the next wave of investment.”