Oil and Gas Exploration and Development

Since first licenses were granted in 1964, around 42 billion barrels of oil have been produced from the North Sea with an estimated 24 billion more in untapped reserves (2014 figures). It is estimated there are between 30-40 years of production remaining (BBC, 2014).

The North Sea is now a mature basin, with oil and has production in inevitable gradual decline. Fig. 1 details hydrocarbon production in Scotland between 1998 projected to 2045. Hydrocarbon production is expected to be around 33% of 2019 levels by 2035 and less than 3% of 1999 peak by 2050.

In 2019, 81% of the oil and gas produced in Scottish waters was exported to the rest of the UK and the world. With the decline in production comes a decline in oil exportation with 49% less oil exported to the rest of the world in 2019 than in 1999 (Scottish Government, 2023). In 2022, the extraction of oil and gas alone was worth an estimated £25.2 billion in GVA to the Scottish economy, representing 11.8% of total Scottish GDP (Scottish Government, n.d.).

Of the 25,000 jobs directly dependent on offshore oil and gas production (in 2019), 98% are located in Aberdeen and Aberdeenshire (Scottish Government, 2023). The Draft Energy and Just Transition Strategy details the need for transition to net-zero energy systems to come with secure employment and economic opportunities for oil and gas workers. Decommissioning of oil and gas production offers new economic and employment opportunities, with the global decomissioning market estimated to be around £67 billion over  the next 10 years (from 2023) (Scottish Government, 2023).

In 2023 a presumption against new oil and gas exploration was introduced. However, analysis indicates that 80% of future oil and gas production will come from existing sanctioned fields as it is unlikely there are large fields remaining that have not yet been exploited (Scottish Government, 2023). Fig. 2 details the projected total oil and gas production and reserves from 2020 to 2050.