The North Sea has already produced 42 billion barrels of oil and gas, but could have as much as 24 billion barrels left, according to FT columnist Nick Butler (“Don’t abandon the North Sea” Feb 22).
For North Sea operators and their supporters, the remaining reserves provide a compelling economic reason to keep producing to avoid leaving value locked in the ground.
The reserves represent tens of billions of dollars in profits, wages and tax revenues that would be lost if the North Sea fields are abandoned prematurely.
North Sea reserves have a strong political dimension because most operators and service companies are based in Scotland, where separatist sentiment remains strong despite the rejection of independence in last year’s referendum.
The economic reality is more complicated. The notional value of the oil and gas that would remain locked in the ground is not a convincing reason why it should be developed. In a market-based economy, resources are developed only if they can be extracted profitably.
And there are many instances where resources have been left in the ground or abandoned because it was no longer possible to exploit them profitably.
